RD157 - Increasing the Availability of Health Insurance Providers in Rural Areas

Executive Summary:

House Bill 1324 of the 2006 General Assembly Session directed the Commissioner of Insurance to prepare a plan to double the level of competition among providers of health insurance products in the Commonwealth’s rural areas. HB 1324 was passed by in the House Commerce and Labor Committee in favor of a letter to the Joint Commission on Health Care (JCHC) requesting a study of the issues contained in the bill.

Some distinct differences are observed when the socio-economic wellbeing of rural (defined in this report as having fewer than 120 people per square mile) and non-rural localities in Virginia are compared. Families in rural localities tend to have lower family incomes and are more likely to experience unemployment and lack health insurance. Small businesses (those least likely to offer their employees health insurance coverage) are disproportionately located in rural areas. Consequently, it was not surprising to find that these socioeconomic factors contributed to accessibility and affordability problems faced by individuals seeking health insurance coverage in rural localities. Conversely, the availability of health insurers was not substantially lower in rural localities when compared with non-rural localities. A review of State-licensed managed care insurers indicated that while rural areas have the lowest number of insurers, all Virginia localities had at least 35 insurers that offer health insurance plans.

Although no legislation was introduced related to this study in 2008, JCHC members voted to endorse the general concept of subsidizing a health insurance product for uninsured Virginians.

On behalf of the Joint Commission and staff, I would like to thank the numerous individuals who assisted in this study, including representatives from Anthem, the Center for Rural Policy Analysis, the Center for Rural Virginia, Community Health Resource Network, the Department of Medical Assistance Services, the Medical Society of Virginia, the National Conference of State Legislatures, Southwest Community Health Systems Inc., State Corporation Commission, Virginia Association of Health Plans, Virginia Commonwealth University Health System, Virginia Community Health Care Association, Virginia Department of Health, Virginia Premier, and Virginia Tech’s Rural Economic Analysis Program.

Kim Snead
Executive Director
June 2008