HD3 - Catastrophic Health Insurance

Executive Summary:

House Joint Resolution 99 introduced by Delegate Christopher P. Stolle (2010) requested that the Joint Commission on Health Care determine the availability and usage of catastrophic health insurance policies in the Commonwealth, evaluate the potential benefits and risks of such policies and other states’ efforts to increase the use of catastrophic health insurance policies.

The most common type of catastrophic health insurance is the high-deductible health plan (HDHP), which is typically less expensive than traditional health insurance. The number of individuals covered by qualified HDHPs in Virginia increased from 50,100 individuals in 2006 to 114,700 individuals in 2008. Insurance plans similar to HDHPs encourage consumers to become more cost-conscious and consequently both appropriate and inappropriate medical care is avoided. HDHPs are beneficial for some individuals, but low-income and moderately sick individuals often have poorer health outcomes in high-cost sharing plans like HDHPs when compared to traditional health insurance coverage.

Virginia has undertaken four of the five most common steps taken by state governments to encourage HDHP adoption. Virginia could take the fifth step and provide greater transparency of cost and quality information through the use of an All-Payer Claims Database. To this end, the Joint Commission on Health Care approved a 2011 staff review to examine other states’ efforts to publicly disseminate expansive cost and quality information (by specific facility and provider for selected medical procedures) as well as the feasibility and cost associated with Virginia Health Information providing similar specific information through an All-Payer Claims Database.

On behalf of the Joint Commission and staff, I would like to thank the numerous individuals who assisted in this study, including representatives from the State Corporation Commission, Virginia Health Information, and the Virginia Association of Health Plans.

A report will be submitted to the General Assembly and the Governor at a later date for publication.

Kim Snead
Executive Director
January 2011