Governor Northam vetoes legislation that would undermine efforts to ensure access to quality, affordable health care

RICHMOND—Governor Northam today vetoed House Bill 2260 and Senate Bills 1027, 1240 and 1674, which would put Virginians at risk of being underinsured, result in rapidly increasing Marketplace premiums, and undermine key protections in the Affordable Care Act. The Governor’s full veto statements are below.

House Bill 2260

March 22, 2019
Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto House Bill 2260, which would direct the Commissioner of Insurance to request federal permission for insurance carriers to offer catastrophic plans to all individuals purchasing coverage through the Marketplace.

This legislation would place consumers at risk of being underinsured and would fragment Virginia’s federal marketplace risk pool, leading to rapidly increasing premiums. House Bill 2260 would allow insurance carriers and individuals to circumvent the protections in the Affordable Care Act. Under current law, catastrophic plans are only available for individuals who are younger than 30 years of age and individuals who qualify for a hardship or affordability exemption. Catastrophic plans typically have lower premiums because they require individuals to 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. Individuals with minimal health care needs are more likely to purchase these threadbare plans, leaving individuals with more complex medical conditions in traditional marketplace plans. This adverse selection would likely contribute to an increase in Virginia marketplace premiums across the board.

Virginia took a positive step to increase the availability of quality, affordable, and comprehensive health care coverage through Medicaid expansion for individuals whose income is lower than 138% of the Federal Poverty Line. Our responsibility is now to look at solutions such as those proposed by the Market Stability Workgroup in order to improve affordability across the Commonwealth’s health insurance markets. House Bill 2260 would undermine those efforts.

Accordingly, I veto this bill.

Sincerely,
Ralph S. Northam

SUMMARY AS INTRODUCED:
Health insurance; catastrophic health plans. Authorizes health carriers to offer catastrophic plans on the individual market and to offer such plans to all individuals. The measure provides that a catastrophic plan is deemed to provide an essential health benefits package and to meet certain requirements of federal law. A catastrophic plan is a high-deductible health care plan that provides essential health benefits and coverage for at least three primary care visits per policy year. Under the federal Affordable Care Act, catastrophic plans satisfy requirements that health benefit plans provide minimum levels of coverage only if they cover individuals who are under 30 years of age or who qualify for a hardship exemption or affordability exemption. The measure requires the Commissioner of Insurance to apply to the federal government for a state innovation waiver allowing the implementation of the provision. The provision will become effective 30 days after the Commissioner notifies certain persons that the request has been approved. This bill is identical to SB 1027.

Senate Bill 1027

March 22, 2019
Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto Senate Bill 1027, which would direct the Commissioner of Insurance to request federal permission for insurance carriers to offer catastrophic plans to all individuals purchasing coverage through the Marketplace.

This legislation would place consumers at risk of being underinsured and would fragment Virginia’s federal marketplace risk pool, leading to rapidly increasing premiums. Senate Bill 1027 would allow insurance carriers and individuals to circumvent the protections in the Affordable Care Act. Under current law, catastrophic plans are only available for individuals who are younger than 30 years of age and individuals who qualify for a hardship or affordability exemption. Catastrophic plans typically have lower premiums because they require individuals to 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. Individuals with minimal health care needs are more likely to purchase these threadbare plans, leaving individuals with more complex medical conditions in traditional marketplace plans. This adverse selection would likely contribute to an increase in Virginia marketplace premiums across the board.

Virginia took a positive step to increase the availability of quality, affordable, and comprehensive health care coverage through Medicaid expansion for individuals whose income is lower than 138% of the Federal Poverty Line. Our responsibility is now to look at solutions such as those proposed by the Market Stability Workgroup in order to improve affordability across the Commonwealth’s health insurance markets. Senate Bill 1027 would undermine those efforts.

Accordingly, I veto this bill.

Sincerely,
Ralph S. Northam

SUMMARY AS INTRODUCED:
Health insurance; catastrophic health plans. Authorizes health carriers to offer catastrophic plans on the individual market and to offer such plans to all individuals. The measure provides that a catastrophic plan is deemed to provide an essential health benefits package and to meet certain requirements of federal law. A catastrophic plan is a high-deductible health care plan that provides essential health benefits and coverage for at least three primary care visits per policy year. Under the federal Affordable Care Act, catastrophic plans satisfy requirements that health benefit plans provide minimum levels of coverage only if they cover individuals who are under 30 years of age or who qualify for a hardship exemption or affordability exemption. The measure requires the Commissioner of Insurance to apply to the federal government for a state innovation waiver allowing the implementation of the provision. The provision will become effective 30 days after the Commissioner notifies certain persons that the request has been approved. This bill is identical to HB 2260.

Senate Bill 1240

March 22, 2019
Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto Senate Bill 1240. This bill would authorize health insurance carriers in the Commonwealth to offer short-term, limited-duration health plans that last up to 12 months and are renewable for up to 36 months.

This legislation undermines an individual’s right to quality, affordable, and comprehensive health care coverage. This would result in many Virginians being underinsured. Short-term, limited-duration plans are allowed to discriminate against individuals with pre-existing conditions, impose lifetime and annual caps, and are not required to provide essential health benefits. A typical short-term policy does not cover maternity care, prescription drugs, or mental health care. Additionally, individuals shifting out of their respective markets into short-term, limited-duration plans are expected to be healthier than average, fueling adverse selection that would increase premiums, negatively impact insurer competition, and destabilize the individual market.

Virginia took a positive step to increase the availability of quality, affordable, and comprehensive health care coverage through Medicaid expansion for individuals whose income is lower than 138% of the Federal Poverty Line. Our responsibility now is to look at solutions such as those proposed by the Market Stability Workgroup in order to improve affordability across the Commonwealth’s health insurance markets. Senate Bill 1240 would undermine those efforts.

Accordingly, I veto this bill.
Sincerely,
Ralph S. Northam

SUMMARY AS PASSED SENATE: (all summaries)
Health insurance; short-term, limited-duration plans. Authorizes health insurance carriers in the Commonwealth to offer short-term, limited-duration health plans. Short-term, limited-duration health plans are defined as plans that have an expiration date that is less than 12 months after the original effective date of the contract, policy, or plan and, taking into account renewals or extensions, have a duration that does not exceed 36 months. Short-term health plans are required to include a specified disclaimer.

Senate Bill 1674

March 22, 2019
Pursuant to Article V, Section 6, of the Constitution of Virginia, I veto Senate Bill 1674. This bill would authorize health insurance carriers in the Commonwealth that offer short-term, limited-duration health plans to offer a guaranteed option for a covered individual to purchase a new plan at a future date without re-underwriting.

This legislation undermines an individual’s right to quality, affordable, and comprehensive health care coverage and would result in many Virginians being underinsured. Short-term, limited-duration plans are allowed to discriminate against individuals with pre-existing conditions, impose lifetime and annual caps, and are not required to provide essential health benefits. A typical short-term policy does not cover maternity care, prescription drugs, or mental health care. Additionally, individuals shifting out of their respective markets into short-term, limited-duration plans are expected to be healthier than average, fueling adverse selection that would increase premiums, negatively impact insurer competition, and destabilize the individual market.

Virginia took a positive step to increase the availability of quality, affordable, and comprehensive health care coverage through Medicaid expansion for individuals whose income is lower than 138% of the Federal Poverty Line. Our responsibility now is to look at solutions such as those proposed by the Market Stability Workgroup in order to improve affordability across the Commonwealth’s health insurance markets. Senate Bill 1674 would undermine those efforts.

Accordingly, I veto this bill.
Sincerely,
Ralph S. Northam

SUMMARY AS PASSED SENATE: (all summaries)
Health insurance; short-term, limited-duration health plans; guaranteed option. Provides that any carrier offering short-term, limited-duration health plans may offer for sale a guaranteed option, defined in the bill as a contract or agreement between a covered person and a carrier that guarantees the option of the covered person to purchase a new short-term, limited-duration health plan at a future date without re-underwriting. The measure specifies that a guaranteed option is not a health benefit plan and that any guaranteed option may set a specified premium rate for any short-term, limited-duration health plan that it guarantees will be available to the covered person in the future.