- Report Published -
|A Contingency Plan for Implementing a Health Insurance Pooling Mechanism in Virginia|
|State Corporation Commission; Bureau of Insurance|
|HJR 329 (Regular Session, 1987)|
|The State Corporation Commission's Bureau of Insurance was requested by House Joint Resolution No. 329 to prepare a contingency plan for the implementation of a health insurance pool in Virginia. This request was made to provide alternative protection for individuals who are considered "uninsurable" for health coverage in the event that the open enrollment periods currently offered in Virginia by the Blue Cross and Blue Shield Plans are discontinued or reduced.|
The information that was produced by the 1985 and 1986 studies on the Taxation of Insurance Companies, the 1984 joint subcommittee study of the feasibility of implementing a health pool in Virginia, and the 1986 study of the degree of health insurance coverage of Virginia were used in this study.
This report contains an overview of health insurance pools in other states and describes the rationale for the decisions that were made in the key areas. A draft of the legislation that could be introduced in Virginia in the event open enrollment coverage is no longer available is included as an appendix to this report. Also included is a draft regulation that could be circulated to interested persons prior to implementation of a health insurance pool in the Commonwealth.
The suggested legislation combines elements of the present National Association of Insurance Commissioners (NAIC) Model Act with provisions included in other state pooling laws and some of the provisions in the Virginia Property Insurance Association Chapter of the Insurance Code. The State Corporation Commission's Bureau of Insurance believes that this legislation will best serve the Virginia public should an insurance pool be needed.
The recommended pool would:
* be available to applicants refused coverage by two insurers;
* require members to be residents of Virginia for at least six months;
* have an initial premium of 150% of the average premium of the five largest insurers by market share offering health coverage in the state;
* be funded by assessments of insurers operating in Virginia if a deficit is produced;
* have a six month pre-existing condition exclusion;
* offer a choice of deductibles; and
* offer comprehensive coverage.
The State Corporation Commission's Bureau of Insurance believes that with this contingency plan in existence a health insurance risk pool could be operational within twelve months. This would allow sufficient time to provide a very viable alternative to those individuals in the Commonwealth that are considered uninsurable. The contingency plan should be activated in the event either of the Blue Cross and Blue Shield Plans operating in Virginia provides notice of its intention to discontinue its open enrollment program. The contingency plan adequately addresses the problem of availability of health insurance for the uninsurable. It does not address the affordability of that coverage.