Virginia considers public option and other insurance affordability strategies

Virginia is joining a number of states considering a public option, among other strategies, to make health insurance more affordable for Virginians. General Assembly members of the Health Insurance Affordability in the Individual Market Subcommittee, under the Joint Commission on Health Care, met Wednesday to consult insurance experts on potential solutions.

 

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Stephen Weiss, the commission’s senior health policy analyst, outlined the current insurance affordability challenges facing Virginians. According to his research, 11.2% of non-elderly adults in Virginia (approximately 559,000) were uninsured as of 2019. 82% of uninsured Virginians were in working class families, and 54% had at least one full time worker. 

Some of the challenges Virginians currently face include out of pocket costs and variation among competition in different counties. See the details below: 

 

Image: Joint Commission on Health Care

 

Additionally, insurance rates can vary depending on age and family size. If a person is a smoker, they may also pay a surcharge after tax credits. 

The commission will work with the Urban Institute, a national research organization, to apply a model that will assess the impacts of five potential insurance affordability solutions: 

  1. State-funded cost-sharing programs
  2. Implementing a public option
  3. Implementing a health insurance coverage mandate
  4. Adjusting the age rating curve
  5. Eliminating the smoking surcharge

The Urban Institute Health Insurance Policy Simulation Model (HIPSM) will assess the solutions’ impacts on individual market premiums, cost sharing, plan enrollment numbers, health care spending, and more. Jessica Banthin, senior fellow at the Urban Institute, told the commission: 

“It’s important for us to study the potential impacts of all of these strategies because each one has its tradeoffs. While there may be benefits for some groups, there may be unintended consequences for other groups.”

After the informational briefing, Del. Mark Sickles (D-Fairfax County), asked for more information on implementing a public option. Currently, Washington state is the only state with a government-run health insurance agency, implemented January 1, 2021. Colorado and Nevada introduced public options that will become available in 2023 and 2026, respectively. 

Washington’s public option has had a slow start so far, with limited Medicare reimbursement rates, higher-than-expected premiums, few enrollees, and has only been implemented in 19 of 39 counties, according to Weiss. 

“One of the big challenges [for Washington state] was network development. The General Assembly in Washington state went back in, changed the law and required hospitals who accept Medicaid and public employer plans, such as state employees, must accept the Cascade select plan starting in 2022.”

Banthin pointed out that the program is still in its first year, and could continue to provide competition for other insurers. 

“When you introduce a new insurer, even if they’re small, the existing insurers realize they no longer have a monopoly position. So that alone will tend to make them keep their premium increases smaller than they otherwise would have been.”

The commission has no further meetings scheduled. However, subcommittee chair Sen. Barbara Favola  (D-Arlington County) suggested a possible meeting later in the year to review the Urban Institute’s HIPSM report and make recommendations to the full commission.

Watch the full meeting here