Kaine warns against insurers leaving rural Virginia communities

U.S. Senator Tim Kaine, a member of the Senate, Health, Education, Labor, and Pensions (HELP) Committee, participated in a hearing with health care stakeholders where he called on insurers to stop depriving people in rural Virginia of opportunities by limiting coverage options or pulling out of the individual markets.

tim kaineKaine called for Congress to pass measures like reinsurance to increase stability in the individual marketplace, and cautioned insurers that he and his colleagues will not tolerate bare counties in Virginia and other states that will harm American families.

“Anthem coming out of Virginia combined with others could lead about 60 to 65 counties in Virginia to be without an insurer riding on the exchange…this is overwhelmingly rural. It’s depriving people in rural Virginia of opportunities,” said Kaine. “I just want to communicate to all insurance companies: there is no way, none, that Congress is going to tolerate a situation where persistently there are counties in this country where people cannot buy insurance on the individual market. We just won’t tolerate it. And the pressure will build and then we will create a solution for it. And the solution will be, if there’s no individual [plans], if there’s no private companies to provide insurance, the solution will be something like Medicare that people can buy in to.”

In light of the uncertainty the Trump Administration has injected into the individual marketplace, Kaine also reiterated his call for reinsurance, which would lower premiums and help stabilize the marketplace. This increased certainty would likely lead more insurers to remain in the individual marketplace.

A transcript of Kaine’s questioning of an Anthem executive at today’s hearing is available here:

Kaine: “You know one of the things these four hearings have shown is that reinsurance is a really popular idea. I have a bill with Senator Carper who’s here to do a federal reinsurance program. There’s a cost to it but it’s not a bailout of insurance companies. What reinsurance does is it brings down premiums for most people, by bringing down premiums it allows some people to buy insurance who weren’t going to do it otherwise. By bringing down premiums it reduces the federal payment of subsidies based on those premiums. It provides a backstop that enables high risk or high claim individuals to get insurance, and it provides certainty to enable insurers to stay in the market. There are five definite benefits to reinsurance and that’s why every witness in the four hearings has asked for it. Mr. Ruiz-Moss, I want to talk to you about Anthem in Virginia, just using it as an example. Anthem was the largest provider of care through our individual marketplace, 330,000 Virginians, and Anthem recently announced it would no longer provide coverage on the individual market. I am right, am I not, that Anthem still does a lot of business in Virginia with group plans and finds Virginia and Virginians in that market very good customers, correct?”

Ruiz-Moss: “Yes, that’s absolutely correct.”

Kaine: “So in the group market Anthem finds Virginia to be profitable and stable but the individual market, you found not to be profitable and definitely not stable, correct?”

Ruiz-Moss: “Correct.”

Kaine: “And I don’t think it’s unfair for Anthem to deliver a message to Congress or for insurers generally that we would like some stability. So in the individual market, if you don’t know whether the mandate is going to be enforced, if you don’t know whether CSR payments are going to be made, if you don’t know whether marketing is going to be done or whether open enrollment is going to be vigorous or narrow, that creates an awful lot of instability for a company like Anthem, and I don’t think it’s unfair for you or other insurers to say to us “give us some stability.” And if we don’t give you stable answers, then you take actions, and I get that, and I hope we can provide stability.

“But I want to turn it around and give you a message about an action we’re likely to take. Anthem coming out of Virginia combined with others could lead about 60 to 65 counties in Virginia to be without an insurer riding on the exchange. We have 134 cities and counties, so that would be half of our counties, not half of our population because this is overwhelmingly rural. It’s depriving people in rural Virginia of opportunities. I think people ought to be able to buy in to Medicare. This is the Tim Kaine view. If I had a magic wand, people under Medicare eligible age I think they should just be able to pay a premium that’s actuarially signed and buy in. And I don’t have the votes for that right now, but I will get the votes for it if there are bare counties in Virginia or elsewhere.

“So just as you’ve communicated to us a desire for stability, which is fair, I just want to communicate to all insurance companies: there is no way, none, that Congress is going to tolerate a situation where persistently there are counties in this country where people cannot buy insurance on the individual market. We just won’t tolerate it. And the pressure will build and then we will create a solution for it. And the solution will be, if there’s no individual, if there’s no private companies to provide insurance, the solution will be something like Medicare that people can buy in to. And when that day comes we won’t just allow them to buy in if insurance companies don’t cover their county. We won’t just allow somebody to buy into Medicare if insurance companies have said they’re too old or too poor, they’re too sick. We will provide a vigorous public option to allow anybody to buy into Medicare. Because we will want to have a broad risk pool, with some young and healthy people just like you would want to have one. So in some ways the bare county phenomenon, I view it, bluntly, the insurance companies have to worry about holding a knife up to their own throat.

“The bare insurance — county phenomenon is going to create incredible pressure for us to provide a solution so the people can have health insurance. And at the end of the day that solution I think is going to be one that is going to work. Directly contrary, you know you’re worried about you know profitability and stability, as you should be, you’re a company, you need to worry about that. But, if you’re thinking about that in the short term and you’re missing the long term, we can’t have bare counties. I’m not going to tolerate one. I’m going to find a solution for the one, and if we can’t find a solution through private insurance, we’re going to find the solution. So just as you’re communicating to us that we owe you stability, and we do, I want to communicate to private insurance companies that we’re not going to tolerate bare counties and we will provide an option, and it will be an option that will be very, very challenging to the insurance industry as we know it. So with that, Mr. Chair, that’s all I have. Thanks.”

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