Re: Democrat Governor Northam vetoes three bills intended to expand insurance access
Date: May 22, 2020 03:43PM
So the health insurance industry got to Northam.
Northam's logic is simple. If the legislation passes then people who currently are required to purchase their health insurance on exchanges may opt to purchase non-exchange health insurance policies which would make the exchange policies less profitable to insurance companies.
Fair enough. Now here is the other side.
The current system is a win-win-win for the health insurance industry. The current system allows non-exchange policies to select populations in the state in a way that results in lower rates and/or better benefits to those populations, while at the same time generating more profits for insurance companies than they would get on exchange policies due to lower payouts, less administrative costs and more reliable collections. It allows the insurance companies to set rates for exchange policies at higher rates based on the need to cover a less healthy population with less ability to pay. It forces a large portion of the healthy population who have the ability to pay to purchase those exchange policies to guarantee it will be profitable to the insurance companies.
If we accept that non-exchange policies should be allowed in Virginia then fairness dictates those policies should be available to the widest possible population. If doing this makes exchange policies less profitable, then the insurance companies could make it up by increasing the cost for non-exchange policies. This would remove some of the incentive for people opting for the non-exchange policies in the first place.