The Healthcare for All Virginians Coalition applauds Governor Northam’s action to protect Virginia from health plans that would have resulted in the erosion of ACA protections and increased costs for people who purchase health coverage through the individual ACA marketplace.
Yesterday afternoon, Governor Northam announced his decision to veto bills HB 795/SB 235 & SB 861 related to Association Health Plans (AHP) and Multiple Employer Welfare Arrangements (MEWAs).
Both AHPs and MEWAs would have weakened the Affordable Care Act (ACA) individual marketplace by “cherry-picking” younger and healthier people away from marketplace coverage. As a result, those left in the marketplace (or risk pool) are more likely to be older adults and individuals with high medical needs, who would then be burdened with increased premiums for the comprehensive coverage they need.
Expanding access to AHPs (HB 795/SB 235) poses unique risks to Virginia consumers:
- Plans would be able to charge different premiums to different associations based on the demographics and social factors of its membership. Associations with more women could be charged more, for example, as well as associations with older workers, in higher risk industries, or based in zip codes with worse health outcomes.
- Implementation of these bills heavily relies on a 2018 U.S. Department of Labor rule. This rule is subject to an ongoing federal lawsuit brought forth by 12 states, including Virginia, that believe major parts of the rule are invalid and undermine ACA protections.
Introducing and expanding access to MEWAs (SB 861) pose similar risks to consumers and have even fewer protections:
- Group-level premiums could be based on gender, age, occupation, and zip code.
- Associations or groups with older members would have no protections against exorbitant premiums due to no limitations in the ability to charge different premiums based on the average age of the group.
- Plans under SB 861 would have no medical loss ratio requirement and would not be subject to rate review or transparency requirements. This means insurers will have no cap on profits and consumers will have no way of knowing how much of their premium is spent on medical services.
Thank you once again to all HAV organization members and advocates who shared their concerns regarding these plans with lawmakers. We did it!