Several bills aimed at controlling health insurance rates and adding consumer transparency advanced in Virginia legislative committees this week.
SB 1734, introduced by Sen. R. Creigh Deeds, D-Bath, aims to address large increases in Charlottesville-area insurance rates on the federal marketplace in 2018. The Senate Commerce and Labor Committee advanced the bill 14-1 Thursday.
“In 2018, Albemarle, Charlottesville, Fluvanna and Greene became some of the most expensive places in the country to buy an insurance plan from the federal marketplace,” Deeds said at the committee hearing. “The main driver was the extremely high rate factor Optima set in the Charlottesville area.”
Deeds’ bill and its companion, HB2770, attempt to deal with a tricky piece of how insurance premiums are set on the federal marketplace: when an insurer wants to offer a product, the company has to make it available across the whole state, but it is allowed to account for the additional cost of providing care in certain areas. That calculation is called an “area rate factor,” and contributed to premium increases of between 195 percent and 247 percent for many Central Virginians paying out-of-pocket for Optima Health plans in 2018.
The bills require that if an insurer increases premiums by increasing an area’s rate factor by more than 15 percent, the company would be required to disclose the underlying factors that led to that decision.
“The answer to our problem is not complicated regulations, it’s merely a bit of additional disclosure that ensures insurers are complying with state and federal regulations in their filings,” said Karl Quist, a co-founder of the advocacy group Charlottesville for Reasonable Health Insurance.
“Are you implying that the insurers were not complying with rules and regulations?” asked Senate Majority Leader Tommy Norment, R-James City.
“Federal regulations require that they provide a detailed picture of their filings, and that did not happen in this case,” Quist responded.
Norment voted against the bill.
Virginia’s Bureau of Insurance already reviews and approves proposed rates, but consumers have been asking for a fuller picture of the data and information used. Throughout 2017 and 2018, Optima and its actuarial contractor, Milliman, declined to share specific data or calculations with Quist’s group or with The Daily Progress, saying the information was proprietary.
No industry or administration officials spoke for or against Deeds’ bill.
HB 2770, sponsored by Del. David J. Toscano, D-Charlottesville, and Del. Kathleen Murphy, D-McLean, passed a subcommittee and had not yet been heard in the full House committee as of press time Thursday.
Deeds’ SB 1475, another bill supported by the Charlottesville group, would allow multi-owner small businesses to purchase insurance through the small group market. The bill advanced to the full Senate on Thursday.
The Senate committee unanimously passed a bill from Sen. Siobhan Dunnavant, R-Henrico, that would allow short-term health plans, which offer lower-cost options with typically lower protections. A similar bill was vetoed by Gov. Ralph Northam last year.