Public Comments for 02/18/2021 Labor and Commerce - Subcommittee #2
SB1341 - Health insurance; association health plan for real estate salespersons.
Last Name: Wood Organization: National Multiple Sclerosis Society Locality: Richmond

The National Multiple Sclerosis Society writes to express serious concern regarding SB 1341, to expand association health plans in the Commonwealth. While the Society acknowledges the need for more affordable health insurance coverage, AHPs are not a viable solution and do not meet the needs of people living with high-cost, complex, chronic conditions like multiple sclerosis. Association health plans skirt important ACA patient protections and can discriminate against Virginians living with MS. Further, as written in this bill (lines 186-188) these plans are not insurance - yet provisions in the bill point to Title 38, Virginia’s insurance code. There is no clear legal authority for the Bureau of Insurance to regulate these plans, as noted in the BOI’s own impact statement on the bill. The law, as written, cannot be implemented. Association health plans do not meet the needs of people living with MS, and pose serious risks to the overall stability of the ACA Marketplace. Instead of expanding association health plans in the Commonwealth, let’s help ALL Virginians by implementing a state reinsurance program instead. The Society strongly urges you to vote no on SB 1341.

Last Name: LeMenestrel Locality: McLean

Dear Members of the Committee & Committee Chair: Please OPPOSE SB 1341 - based on expertise provided by prominent organization The Commonwealth Fund, as follows: "The Trump administration had made the formation of association health plans (AHPs) — those offered by business or professional associations to their members — a central focus of its health policy agenda by significantly expanding their reach, but a federal court decision made in March has found the new rules violate federal tax law. AHPs have existed for decades. Many are legitimate arrangements made by associations to offer health benefits to members, but some have defrauded enrollees or ended up insolvent, unable to pay members’ claims. AHPs can set rates for their small-group members based on the health status of the small group. This cherry-picking of good risks will make coverage less expensive for people with lower health care costs, but it is likely to raise premiums for those with preexisting conditions who remain in the ACA-compliant market. The AHP rule is based on a different vision of health insurance markets than the philosophy of the ACA — a vision that values lower cost for some over coverage for all."

Last Name: Casper Organization: American Lung Association Locality: Newark

Thank you for the opportunity to provide comments on behalf of the American Lung Association in Virginia and the patients we serve with lung disease and on behalf of all the Virginians who depend on access to adequate, affordable and accessible health coverage. Lung Disease patients including those with asthma, lung cancer, and acute bronchitis have unique health needs. Comprehensive coverage is vital to ensure all lung disease patients have access to the medications, treatments and specialists they require to live. The American Lung Association strongly opposes SB 1341 that would allow any expansion of Association Health Plans. SB 1341 creates plans that are defined as not insurance coverage • As drafted the plans created are not required to comply with current state regulation and the patient protects of the Affordable Care Act (lines 183-184 demonstrate this) • While they may appear to provide protections for people with pre-existing conditions, the referenced code is only applicable to insurance policies. SB 1341 puts people who purchased plans on the individual market at risk • These plans could market to and attract younger, healthier individuals, pulling them out of the marketplace, leading to potential higher premiums for those that remain, essentially cherry-picking healthier consumers and allowing sicker patients to remain in the marketplace • This bill would allow AHPs to charge older adults 5 times as much for their premiums, which is much more limited in ACA complaint plans SB 1341 would be available to groups beyond Realtors in Virginia • These plans could be sold in other states, as long as just one member lives in Virginia • There is nothing prohibiting another group to seek the same authorization and create their own plan, therefore potentially destabilizing the ACA marketplace Association Health Plans (AHPs) are the wrong solution. These plans pose risks to patients and consumers and the Lung Association is asking that you PLEASE VOTE NO on SB 1341. The American Lung Association thanks you for the opportunity to share our comments on this proposed piece of legislation. We hope that you will act to protect patients with lung disease and all those who rely on adequate, affordable and accessible health care.

Last Name: Sarkash Organization: Small Business Majority Locality: Washington, D.C.

Dear Chairman Heretick and other members of the Committee: I am writing to you to urge you to oppose SB 1341, which would have negative impacts on the marketplace—and consequently on small businesses that already struggle with healthcare costs. Ensuring strong and robust individual and small group healthcare marketplaces is vitally important to Virginia’s entrepreneurs because this is essential to keeping costs down for business owners and their employees. Unfortunately, SB 1341 would create a less protected insurance market that would only drive up premiums. For instance, as drafted, SB 1341 is not defined as insurance coverage, meaning it does not have to comply with state requirements or patient protection under the Affordable Care Act (ACA). In fact, the legislation’s premium allowable rating is a 5:1 ratio, meaning an insurer could charge older adults up to five times the normal premium amount. This does not comply with the Affordable Care Act’s guidelines of a 3:1 ratio. What’s more, this bill would not be limited to realtors in Virginia. The bill would allow these plans to be sold in other states, so long as one member lives in Virginia, further incenting other groups to recreate this model, resulting in a destabilized ACA marketplace. These plans put small businesses at risk since they are not treated like traditional insurance, which limits the state’s ability to protect those with pre-existing conditions. Though these plans might make it easier for younger and/or healthier employees to purchase coverage through association health plans, the tradeoff is small employers with older and/or sicker workers would end up paying more. Furthermore, consumers who would need robust healthcare would eventually be priced out as well. Association health plans are dangerous additions to the marketplace that undermine the small group market and could raise costs for small business owners. I strongly urge you to oppose SB 1341.

Last Name: Cariano Organization: Virginia Poverty Law Center Locality: Richmond

The Virginia Poverty Law Center opposes SB 1341 and the expansion of Association Health Plans. This bill in the companion to HB 2033, which was previously tabled in sub-committee 2 by the patron. I agree that there is still a health insurance affordability issue for many Virginians, especially those who must by individual coverage and are ineligible for Premium Tax Credits. However, AHPs are not the answer - expanding them inadequately addresses the issue, and may even exacerbate it. AHPs can skirt important ACA consumer protections and target younger and healthier enrollees. They can discriminate against older workers by charging them 4 times (lines 180-181) more than younger ones versus the ACA’s to 3:1 ratio. AHPs can also discriminate by using non-ACA such as drug utilization. This hurts older and sicker individuals. These practices split the ACA risk pool and increase rates in the individual and small group markets. Additionally, this bill is ambiguous. Lines 186-188 say that these plans are not insurance. However, the legislation is written into and refers to many insurance provisions in Title 38, Virginia's insurance code. This brings into question the regulatory authority of the SCC over these plans. If AHPs are not insurance and not subject to Virginia’s insurance laws, then the SCC cannot regulate the plans. The language that the SCC can impose any insurance requirement “as it deems appropriate” (Lines 188-191) does not address this. In fact, the SCC FIS states, “If the coverage is to be subject to the Commission’s regulatory authority as stated in the bill, the paragraph on lines 186-190 should be deleted.” The SCC FIS also states that the inclusion of self-employed individuals is contrary to federal law regarding the formation of AHPs. The law, as is written, cannot be implemented. Oral arguments on the rule that would allow this were heard over a year ago. On January 28, 2021, the DOL requested that the court hold the appeal further while the new administration reviewed the rule, the same day President Biden issued an executive order requiring the review of this rule. For these reasons, I urge you to vote no on SB1341.

Last Name: Casper Organization: American Lung Association Locality: Newark

Dear Chair Ward and Members of the Labor and Commerce Committee: Thank you for the opportunity to provide comments on behalf of the American Lung Association in Virginia and the patients we serve with lung disease and on behalf of all the Virginians who depend on access to adequate, affordable and accessible health coverage. Lung Disease patients including those with asthma, lung cancer, and acute bronchitis have unique health needs. Comprehensive coverage is vital to ensure all lung disease patients have access to the medications, treatments and specialists they require to live. The American Lung Association strongly opposes SB 1341 that would allow any expansion of Association Health Plans. SB 1341 creates plans that are defined as not insurance coverage • As drafted the plans created are not required to comply with current state regulation and the patient protects of the Affordable Care Act (lines 183-184 demonstrate this) • While they may appear to provide protections for people with pre-existing conditions, the referenced code is only applicable to insurance policies. SB 1341 puts people who purchased plans on the individual market at risk • These plans could market to and attract younger, healthier individuals, pulling them out of the marketplace, leading to potential higher premiums for those that remain, essentially cherry-picking healthier consumers and allowing sicker patients to remain in the marketplace • This bill would allow AHPs to charge older adults 5 times as much for their premiums, which is much more limited in ACA complaint plans SB 1341 would be available to groups beyond Realtors in Virginia • These plans could be sold in other states, as long as just one member lives in Virginia • There is nothing prohibiting another group to seek the same authorization and create their own plan, therefore potentially destabilizing the ACA marketplace Association Health Plans (AHPs) are the wrong solution. These plans pose risks to patients and consumers and the Lung Association is asking that you PLEASE VOTE NO on SB 1341. The American Lung Association thanks you for the opportunity to share our comments on this proposed piece of legislation. We hope that you will act to protect patients with lung disease and all those who rely on adequate, affordable and accessible health care.

End of Comments