Republican leaders made a promise to Virginians this year: do everything they can to reduce out-of-pocket healthcare costs.
Senate President Pro Temp Steve Newman reiterated that promise during the GOP response to Governor Ralph Northam’s State of the Commonwealth address earlier this month.
“Too many Virginians find they simply can’t afford the premiums today,” Newman said. “This year, we’re advancing a package of healthcare proposals that will come from the private sector, not from government.”
Their key message: provide more options to consumers that are cheaper than what’s currently available. One of those options: expanding what’re called association healthcare plans.
Republican Delegate Tony Wilt is carrying one of the bills to allow employees of small businesses -- not necessarily in the same company or even the same industry -- to band together and form an association health plan.
“Small businesses…they can't qualify for the individual marketplace through the Affordable Care Act, but they also find themselves unable to afford the extremely high premiums on their market,” Wilt said. “So they're kind of stuck. I've talked to individuals at home that fit that category, that they're just kind of stuck in nowhere land.”
Virginia already has some health plans that fit this mold -- for bankers and for a group of private colleges. President of the Council of Independent Colleges of Virginia Robert Lambeth says the association model works for them because they have a large pool of people -- and lots of resources -- to support it. A total of 16 colleges and around 7,000 individuals are included.
Tim Klopfenstein -- who helps keep the program running -- said it would be hard for much smaller groups to make the same model work. According to an expert benefits consultant they worked with, Klopfenstein says at least 1,500 members minimum are needed to sustain it in the long-run.
Republican Delegate Chris Head’s proposed another bill to extend this type of plan to members of the Virginia Farm Bureau.
“So it gives them an opportunity to have some coverage that they weren't able to have before,” Head said.
Association plans aren’t required to provide all of the 10 essential health benefits that plans offered through the Affordable Care Act are required to provide, things like emergency hospitalizations, and treatment for mental health and substance abuse disorders.
A representative from the Virginia Farm Bureau said during a committee meeting last week that some coverage is better than no coverage. Others, like Jill Hanken with the Virginia Poverty Law Center, argue that if consumers don’t read the fine print, they could end up signing up for coverage that won’t protect them when they get sick.
“It's sort of the wild west of health insurance,” Hanken said.
But it’s not just association health plans Hanken is worried about. She points to legislation that would expand the availability of short-term health insurance plans.
“We understand that legislators want consumers in Virginia to have more options, but they need to be good options that do provide health coverage that most people need,” Hanken said. “And the short-term policies don’t make it.”
Right now, short-term plans are only available for 3-6 months, and are designed as stop-gap coverage for people between jobs, or transitioning from school to the workforce. But under legislation introduced by Senator Bryce Reeves, they could be extended for up to a year, with the option to renew for three years.
“There's a lot of folks that say, these policies don't cover everything,” Reeves said. “Well, they're not supposed to.”
Reeves argues that someone in their late 40s shouldn’t have to pay for things like maternity care. Freddy Mejia, healthcare policy analyst at the Commonwealth Institute, disagrees. Mejia calls the short-term plans ‘skimpy’ and ‘junk health plans.’
“Consumers should be really weary of these programs,” Mejia said. “They're not required to cover mental health services, substance abuse services or any maternity services.”
There’s another bill that seeks to expand access to catastrophic plans. Right now, they’re primarily only available to people 30 or under. Republicans point out these plans have low premiums, which they say could benefit others regardless of age. But, they also have high deductibles.
Mejia -- along with other groups like the Virginia Association of Health Plans -- says the legislation would ultimately lead to higher costs for everyone, including those opting for these catastrophic plans.
“Insurers, the people who run these health coverage plans, do a number of things that rarely have anything to do with tackling the underlying costs of healthcare,” said Lynn Quincy, who directs Altarum’s Healthcare Value Hub. “So they might do things like cut benefits out of coverage in order to make healthcare more affordable or they might shift cost sharing onto consumers in order to make the premiums more affordable.”
Critics of the GOP plans argue that there are other steps Virginia can take to bring down healthcare costs, like creating a state-run health insurance marketplace. Right now, Virginia is using a federally-run one.
That fix may have to wait another year. A Republican senator’s proposal to study a state-run marketplace was left to die in committee by Republican Speaker of the House Kirk Cox.
