Report to the General Assembly (Published)

Document Title

Study on the Feasibility of Establishing a High Risk Pool in Virginia

Author

Joint Commission on Health Care

Enabling Authority

SJR 126 (1998)

Executive Summary

Senate Joint Resolution (SJR) 126 of the 1998 Session of the General
Assembly directed the Joint Commission on Health Care to continue its
study of the feasibility of establishing a high risk insurance pool in
Virginia.

Specifically, SJR 126 directed the Joint Commission's study to
include an analysis of: (i) the problems encountered by high risk
individuals in obtaining affordable health insurance coverage; (ii) whether
the current "open enrollment" program, a high risk pool, or other
mechanism would best serve the needs of persons with high risk medical
conditions; (iii) which type of approach provides the best mechanism for
insuring high risk persons in terms of its impact on the health insurance
market; (iv) which type of program provides the Commonwealth with the
best approach to insuring high risk individuals; and (v) the practicality of
administering both an open enrollment program and a high risk pool.

Based on our research and analysis during this review, we
concluded the following:

*states have taken different approaches to covering persons
with high risk medical conditions: (i) 27 states have
established high risk insurance pools; (ii) 9 states have a
guaranteed issue requirement in the individual market; (iii) 6
states, including Virginia, and the District of Columbia
administer open enrollment programs; (iv) 2 states have
adopted other programs for high risk persons; and (v) 6 states
have not adopted any mechanism to cover high risk persons;

*Virginia's open enrollment program provides comprehensive
health insurance to persons with high risk medical conditions;
Trigon Blue Cross Blue Shield and Blue Cross and Blue Shield
of the National Capital Area are the Commonwealths two
open enrollment carriers;

*overall, the level and cost of the health insurance coverage
offered through Virginia's open enrollment program are
comparable to that offered through high risk pools in other
states;

*the open enrollment program provides reasonable access to
coverage for persons with high risk medical conditions as
evidenced by the fact that, in 1997, there were approximately
21,000 Virginians enrolled in the program;

*the Commonwealth imposes a lower premium tax rate on
open enrollment carriers (0.75%) than other carriers (2.25%) on
premiums derived from individual subscriber contracts to
subsidize the cost of the program; in 1997, this tax differential
amounted to $5.4 million;

*because the cost and level of coverage available through
Virginia's open enrollment program are generally comparable
to high risk pools in other states, it would appear that the only
reason to move away from the open enrollment program
would be to change the manner in which the cost of covering
uninsurable persons currently is shared among enrollees, the
insurance industry, and the Commonwealth; and

*except in very limited circumstances, no state currently
operates both a high risk pool and an open enrollment
program; administering two programs in Virginia would be
duplicative.

A number of policy options were offered for consideration by the
Joint Commission on Health Care regarding the issues discussed in this
report.
Our review process on this topic included an initial staff briefing,
which comprises the body of this report. This was followed by a public
comment period during which time interested parties forwarded written
comments to us regarding the report. The public comments provide
additional insight into the various issues covered in this report.