Three health insurance proposals which passed the Virginia General Assembly only to be vetoed are now front and center in the November election. What were they? Were they efforts to weaken and ultimately destroy the Affordable Care Act (Obamacare) or efforts to provide lower-cost choices for those unable to afford ACA policies?
At the end of the 2019 General Assembly, Governor Ralph Northam vetoed seven related bills, but they represented various versions of just three basic ideas for lower-cost insurance plans:
- Allow member-based associations to aggregate a large group to offer lower-cost coverage to their members, who might be small businesses or even self-employed individuals facing much higher costs. There were three successful bills in this category, and they received bipartisan support before the Governor killed them. You can see the bill history on Senator Siobhan Dunnavant’s Senate Bill 1689 here.
- Allow short-term plans to expand from 90 days of coverage to 364 days, with two possible renewals for almost three years of coverage. Even though legislation failed, federal rules now allow that, and Virginia’s regulations have been amended accordingly. There were two bills passed in this arena, both with bipartisan support and one receiving a 40-0 vote in the Senate. That was Senator Bryce Reeve’s Senate Bill 1240.
- Allow for high-deductible catastrophic coverage plans, authorized now under the federal ACA for individuals under age 30 who qualify for a hardship or affordability exemption. There were also two bills on this topic, one of which passed the Senate 38-2. That was Senator Glen Sturtevant’s Senate Bill 1027.
None of those details, including the initial bipartisan support, come through in the heat of a campaign season. Instead the voters are told that the bills “let insurance companies deny coverage for pre-existing conditions.” That particular claim was ruled “false” by PolitiFact, which noted that short-term plans extended to 364 days administratively even though the bill was vetoed.
PoliticFact’s journalistic yellow card has done nothing to stop the election rhetoric, which is testing whether the federal ACA has now become a political third rail entitlement similar to Social Security. Republicans who voted against expanding Medicaid in Virginia, and even some who voted for it, are also charged with mortal sins against Obamacare, “denying health care to 400,000 people.”
And in a year when monopoly utility donations were expected to be radioactive, it is donations from the insurance industry and health care providers which draw attacks. Again, a basic check on the Virginia Public Access Project reveals those donors have spread about $10 million quite evenly among both parties, perhaps paying for the ads which now imply their corruption.
At a Thomas Jefferson Institute policy forum one year ago, survey results from the National Federation of Independent Business revealed health care cost as the number one concern of its members. More than half ranked it as a crucial concern, far above any other on the list. Small business advocates were at the forefront advocating for the lower cost, limited benefit alternatives.
Governor Ralph Northam’s vetoes of these and similar bills in 2018 are all based on the claim that anybody who can leave the highly mandated benefit structure of the ACA will do so. He points to those who are healthy or those who know they won’t need some of the mandated services, such as maternity care.
In his veto message on Dunnavant’s bill, typical of all of them, Governor Northam called it: “concerning for several reasons. Association health plans (AHPs) are not required to cover essential health benefits including maternity care and prescription coverage. Additionally, AHPs would be able to set different premium rates based on characteristics like age, gender, job, and preexisting conditions. This bill would undermine current efforts to stabilize the Virginia health insurance marketplace. Virginians who enroll in AHPs may be disproportionately healthy when they enroll leading to higher premiums for Virginians who do not qualify for an AHP and remain in the marketplace.”
On Sturtevant’s bill seeking to expand catastrophic coverage, the Governor wrote this: “Catastrophic plans typically have lower premiums because they require individuals to (pay) very high deductibles before the plan pays for health care costs. Many individuals enrolled in a catastrophic health plan may forego medical services because of cost.” In the real world of private employer coverage, high deductibles are also commonplace, and those customers also sometimes forego services to avoid them.
Is no insurance at all the better choice for those with no employer coverage?
The bills in question were all sponsored by Republicans, and the lack of bipartisan sponsorship made the vetoes easier, despite the bipartisan floor votes. The Senate Republican Caucus in particular highlighted these ideas, none of them unique to Virginia and several of them already in place elsewhere.
When Northam vetoed the association health plan bill, after proposing a failed amendment to reduce its scope, the Senate Republicans reacted angrily, questioning whether the Governor really is committed to finding solutions for those who can’t afford or do not want the full ACA coverages.
“Considering this administration’s previous actions on legislation that would have made healthcare more accessible and affordable for individuals, today’s decision to deny small businesses and their employees the same options is disappointing, but not surprising,” said Senate President Pro Tempore Stephen D. Newman (R-Bedford), Chairman of the Senate Education and Health Committee. “With this veto, the Administration has reaffirmed its rigid insistence on a ‘one-size-fits-all government-knows-best’ policy on healthcare coverage.”
The voters may not realize it, but they are now being asked to endorse the “one-size-fits-all government-knows-best” approach on November 5. If they do, that may end efforts to create flexible lower cost alternatives in Virginia.
Stephen Haner is Senior Fellow for State and Local Tax Policy at the Thomas Jefferson Institute for Public Policy.