SD9 - Measures That Increase Access to Affordable Health Care Coverage for Individuals and Their Families


Executive Summary:
Senate Joint Resolution No. 332 requested the State Corporation Commission's Bureau of Insurance (Bureau), in cooperation with the Joint Commission on Health Care (JCHC), to examine individual and conversion health care coverage. The Bureau was requested to determine measures that increase access to affordable health care coverage for individuals and their families.

The majority of Virginians are insured for health care by employer-based coverage. Those Virginians covered by individual health contracts face higher costs, fewer choices, and more market uncertainty.

In accordance with Senate Joint Resolution No. 332, the State Corporation Commission's Bureau of Insurance makes the following recommendations:

(1) Insurers in the individual market should be required to offer the essential and standard health plans, developed by the Essential Health Services Panel, to all applicants;

(2) Contracts sold in the individual market should be offered on a guaranteed renewal basis; and

(3) Essential and standard plan contracts issued in the individual market should be subject to a modified community rating similar to the requirements for primary small employers and riders that reduce or eliminate coverage for specified conditions should be prohibited for the essential and standard contracts.

For the purpose of this report and its recommendations, the individual health contracts that provide coverage for accident only, credit, disability, Medicare supplement or long-term care insurance, dental only or vision only, specified disease, hospital confinement indemnity coverage, coverage issued as a supplement to liability insurance, workers; compensation, automobile medical payments or automobile medical expense coverage are excluded. The recommendations also do not apply to contracts for coverage of Medicare services, or federal employer health plans.

The Bureau recommends the above incremental actions based upon a review of activities in other states and on the national level. The recommended reforms, when combined with House Bill 2043 (Chapter 522, 1995 Acts of the Assembly), passed by the 1995 General Assembly, will parallel the reforms currently in place in Virginia's small employer market.

The Bureau believes that it is important to continue reforms on the state level, but that reforms in the individual market should not be dissimilar to those in the small group market. There is a potential for shifting of the potential insured from one market to the other to obtain what is viewed as more favorable treatment when the requirements in the two markets differ substantially.

The Bureau also believes that individual contracts issued as conversions from a group polity should be issued on a guaranteed renewal basis. The essential and standard plan contracts should be offered as options to those converting to individual coverage, and if the individual chooses one of those plans, it should be subject to modified community rating as provided for primary small employer groups in § 38.2-3433.

The Bureau recognizes that the recommendations contained in this report will not extend to those individuals converting from self-insured benefit programs because of pre-emption by federal law. We also recognize that these reforms will not assure access to health coverage for every individual in Virginia. We believe, however, that the implementation of these recommendations will continue the incremental improvements that will make health care coverage accessible to many Virginians currently without access to coverage.