The purpose of this report is to provide an overview of recent trends in Virginia's individual market and present findings and recommendations of the Virginia Market Stability Work Group (Work Group) to stabilize that market. The Secretary of Health and Human Resources, as directed by the General Assembly established this Work Group pursuant to the 2018 Appropriations Act, Item 281 D, which states:

The Secretary of Health and Human Resources shall convene a work group to examine recent trends in the individual insurance market and state options for stabilizing that market. The examination shall include, but not be limited to, a review of association and catastrophic health plans as well as innovative solutions that reduce individual insurance premiums and out-of-pocket costs while preserving access to comprehensive health insurance. The examination shall also consider the resources necessary to fund any proposed options. The work group shall include the Commissioner of Insurance or his designee, the Virginia Association of Health Plans, chambers of commerce, and other relevant stakeholders at the discretion of the Secretary. The Secretary shall report his findings and recommendations to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees by November 1, 2018.

The Work Group was composed of a diverse group of stakeholders, including members from the following state agencies, organizations, and groups:

• Office of Health and Human Resources
• Commissioner of Insurance and other representatives of the Bureau of Insurance(*1)
• Virginia Association of Health Plans
• Medical Society of Virginia
• Virginia Hospital and Healthcare Association
• Virginia Chamber of Commerce
• National Federation of Independent Business
• Virginia Poverty Law Center
• AARP Virginia
• Washington and Lee University

As the meetings were open to the public, various representatives from related industries, including insurance carriers and physician member organizations, were also involved in the discussions.

The Work Group first met on August 13, 2018, with six meetings held between then and October 9, 2018. Deputy Secretary Figueroa at the outset of the Work Group presented a work plan to guide the Group's examination, one that was adjusted as needed to meet the dynamic nature of the Group's interests and discussions. Minutes were taken during each meeting and then provided to members before the subsequent meeting.

During the first three meetings, the Work Group examined the structure of health insurance and the insurance market under the Patient Protection and Affordable Care Act (ACA), how the federal landscape impacts market stability, and approaches other states have taken to stabilize their respective markets. Experts from the Bureau of Insurance, Virginia Association of Health Plans, University of Virginia School of Medicine, National Association for Health Underwriters, Princeton University, State Health and Value Strategies, and Manatt Health led these respective discussions. The final three meetings involved a discussion of state options to stabilize the Virginia Market, including advantages and considerations of each option and how the approach would be operationalized in the Commonwealth.

From the aforementioned discussions, the Virginia Market Stability Work Group viewed the following policy actions as most promising to stabilize Virginia's individual market:

1. Pursue a reinsurance program through a 1332 state innovation waiver (1332 waiver);
2. Develop a state-based exchange and utilize this platform for market enrollment, including outreach and application assistance; and
3. Increase transparency and develop consumer protection policies for short-term limited-duration plans and association health plans.
4. Provide a state funding source for additional outreach and enrollment assistance.

This report further details Work Group member feedback and provides considerations brought forth during discussions.
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(*1) Non-voting representation, providing technical assistance only