HD38 - Report of the Joint Subcommittee Studying the Crippled Children's Program and Mandated Health Insurance Benefits

  • Published: 1983
  • Author: Joint Subcommittee Studying the Crippled Children's Program and Mandated Health Insurance Benefits
  • Enabling Authority: House Joint Resolution 90 (Regular Session, 1982)

Executive Summary:
For the past decade the Commonwealth has enacted certain laws which stipulate that all health insurance policies or contracts issued in Virginia must provide insureds with certain benefits or coverages, termed "mandated benefits" or "mandated coverages." By the beginning of 1982 there were eight statutes in the Code of Virginia mandating that particular benefits be provided and five statutes in the Code mandating that particular benefits be made available by insurers for purchase by policyholders.

As the number of mandated benefits has increased, a growing number of persons have expressed the concern that mandated benefit laws might be a significant factor in the tremendous increase in health care costs during the last decade. Some individuals have expressed the opinion that the Commonwealth's mandated benefit laws should be repealed or that a statutory "freeze" against the adoption of any further mandates should be enacted.

On the other hand, many individuals have argued that while mandated benefits may result in some increase in health care costs, mandated benefits are essential if the citizens of the Commonwealth are to be assured of adequate health care coverage. Many proponents of mandated benefits have argued that additional health care coverages should be mandated by the General Assembly.

Several bills dealing with mandated benefits were introduced during the 1982 General Assembly Session. After considering those bills and the whole issue of mandated benefits, the Legislature decided that a comprehensive study of the mandated benefits issue should be conducted. Furthermore, the Legislature decided to enact a statutory "freeze" which provides that group policyholders do not have to purchase any additional coverages. This freeze was effected by the passage of Senate Bill No. 358 (Chapter 577 of the 1982 Acts of Assembly), which stipulates that any coverage, benefits, or services first mandated on or after July 1, 1982, must be offered as options to any new or renewal group policies or contracts. The other legislation dealing with mandated benefits introduced during the 1982 Session was defeated with the understanding that it, and the entire mandated benefits issue, would be studied by a joint subcommittee during 1982.

The language authorizing a study of the mandated benefits issue was incorporated into House Joint Resolution No. 90 of 1982, which had been originally drafted to allow a joint subcommittee to study the insurance-related problems of the State's Crippled Children's Program. The State Department of Health, the agency responsible for administering the Crippled Children's Program, had requested the study, because it feared that health insurers in the Commonwealth would enforce the so-called "exclusionary clauses" in their policies, under which those insurers can refuse to pay for services provided under federal, state or local laws. The department was concerned that if health insurers denied coverage to participants in the Crippled Children's Program, the Commonwealth would have to substantially increase its funding for that program in order to pay for the participants' health care costs.

The patron of House Joint Resolution No. 90, Delegate William T. Wilson of Covington, agreed to amend the resolution so as to allow a joint subcommittee of the House Committee on Corporations, Insurance and Banking and the Senate Committee on Commerce and Labor to study both the insurance-related problems of the Crippled Children's Program and the issue of mandated health insurance benefits.

Attached as Appendix I of this report is a copy of House Joint Resolution No. 90 of 1982.

Members of the House of Delegates appointed to serve on the joint subcommittee were: William T. Wilson of Covington; Alson H. Smith, Jr. of Winchester; Gladys B. Keating of Fairfax; Walter H. Emroch of Richmond; Vincent F. Callahan, Jr. of Fairfax; and Frank D. Hargrove of Hanover. Members of the Senate appointed to serve on the study group were: Willard J. Moody of Portsmouth; Virgil H. Goode, Jr. of Rocky Mount; Frederick C. Boucher of Abingdon; and Nathan H. Miller of Bridgewater.

The following individuals were appointed citizen members of the subcommittee: George I. Dobbs of Hampton; Linda J. Pasternak of Richmond; Stephen S. Perry, Jr. of Norfolk; and James C. Roberts of Richmond. James M. Thomson, Commissioner of Insurance for the Commonwealth, was appointed an ex-officio member of the subcommittee.

Hugh P. Fisher, III of the Division of Legislative Services served as professional staff to the subcommittee. The Clerk's Office of the House of Delegates performed administrative and clerical duties for the subcommittee.