Governor Ralph Northam has struck down four Republican bills that he claims would “undermine” Virginia’s health insurance marketplace and raise the cost of care for everyone. Ironically, this is the same problem that Republican senators say their proposals were set to fix for Virginians who are unable to afford healthcare insurance.
Northam vetoed the bills on Friday, saying lawmakers should articulate a more comprehensive solution to the problems that have caused premiums to skyrocket for individuals and small businesses purchasing coverage in the commercial marketplace. Or course, the fact is that insurance premiums are going up because of the inherent flaws of the Obama-era Affordable Car Act (ACA).
Many insurers in the subsidized markets created by the ACA are still struggling to overcome financial losses. The cost of care for their new customers turned out higher than expected, a fundamental factor driving premiums higher and encouraging some insurers to exit the marketplace altogether.
Though, Northam believes, as do the Democratic minority in the General Assembly, that the crumbling of the marketplace is to be blamed on those who decide not to participate in government-mandated healthcare – not the weakness of the program.
In reference to the Republican bills from the upper chamber, Northam vetoed all those dealing with providing aid, not to the ACA marketplace, but to actual Virginians with ailing healthcare plans. “This legislation would place consumers at risk of being underinsured and would fragment Virginia’s federal marketplace risk pool, leading to rapidly increasing premiums,” the governor said in each veto, according to a report from the Richmond Times-Dispatch.
Northam said the solution should begin with expansion of Virginia’s Medicaid program under the ACA, which he said had lowered commercial premiums in other states that have expanded, while boosting employment and wages.
“We are fortunate to have a better opportunity to expand health care to people who need it and make it more affordable for all Virginians,” he said in each veto statement.
What Northam does not understand, or maybe he does, is that the ACA turns the healthcare industry from an individualized, tailor-made experience for patients to a factory-style assembly line. Because of the expansion of Medicaid in other states and because of the ailing financials of the ACA, doctors with smaller practices have had to close up shop and join hospitals. They have had to see 30, 35, 40, patients per day just to turn a small profit.
Doctors have been pushed out of the care industry and into the bureaucracy.
The slim Republican majority was looking at reversing this trend in allowing more freedom in the healthcare industry.
Two bills sponsored by Senator Siobhan Dunnavant (R-Henrico) would have allowed the creation of non-profit “benefits consortiums” and sponsoring associations to offer health plans.
Senate Bill 934 would have authorized non-profit organization to sell benefits plans to its members. The benefits plans could provide medical prescription drug, dental, and vision coverage for the employees of members and the sponsoring association and their dependents, which may be self-funded or purchased from an insurer.
Moreover, Senate Bill 935 would have replaced references to “‘bona fide association,’ as used in provisions applicable to health care plans in the small employer market, with the term ‘sponsoring association,'” to provide care, according to the bill.
A third Dunnavant measured sponsored with Senator Bryce Reeves (R-Spotsylvania) would have allowed people to purchase short-term healthcare policies of up to 364 days, of course with federal approval.
Senate Bill 844 would mean that people could sign up for health insurance in the times when they cannot get it from their employer. For example, most employers maintain a 60 to 90 days waiting period before someone can sign up for health benefits with an employer. As well, those who lose their job and cannot afford the high-cost, high deductible COBRA could have benefited from the legislation.
Northam called the short-term plans “stopgap policies” that usually do not cover mental health treatment and other needs. And he is right – if one does not believe they need or want certain types of coverage, they should be able to opt-out, accordingly.
“People with minimal current health care needs are more likely to purchase these skimpy plans, leaving people who have more significant health care needs in the marketplace,” he said, estimating that the plans would increase marketplace premiums by more than 19 percent. And he is right again – the only way to pay for anything within the ACA is for healthy people who do not need or use healthcare insurance to subsidize those who do.
Northam also said Senate Bill 964, proposed by Glen Sturtevant (R-Richmond) to allow more people to purchase “catastrophic” health plans at lower costs and higher deductibles would “undermine” marketplace risk pools and raise premiums. Catastrophic health plans currently are limited to people under 30 years old who would pay lower premiums for insurance with deductibles of more than $7,000 a year. The measure would have allowed a catastrophic plan to provide essential health benefits and coverage for at least three primary care visits per policy year.
Northam said the GOP bills would circumvent consumer protections in state law and the ACA while failing to cover essential health benefits.
All of these bills were set to circumvent the ACA because government-mandated healthcare spoils the fruits of innovation and economic altruism that a free-market healthcare system provides.
When it comes to “essential benefits” that is something that should be decided upon between a patient and their doctor.
The real purpose of Northam’s vetoes is to expand Medicaid, and the real purpose of Medicaid expansion, as senior fellow at the free-market National Center for Policy Analysis John Graham says, “is to increase profits and employment in hospitals and other sites of care.”
Northam says the plan from Democrats will boost employment and wages, referencing other states. Though, as Graham analyzed Michigan’s Medicaid expansion program, dubbed the “Healthy Michigan Plan,” the real benefits of expansion surface.
“It’s certainly been a benefit to the state of Michigan from an economic standpoint to have about three and a half billion dollars of new funding coming in to support care for people in the Healthy Michigan Plan and to cover those costs for the doctors and the hospitals who are taking care of these persons,” he said in a report from Detroit News.
Graham explained, “Even if we accept Medicaid is socially necessary welfare, the federal government gets its money from all 50 states…Workers and businesses outside the healthcare bureaucracy are paying the price of Obamacare’s Medicaid expansion, with sluggish job and wage growth.”
The vetoes from Northam mean that decision-making power is taken away from the people and given to the healthcare bureaucracy that has been created through decades of dysfunction. The only counterproductive measures here are the Republicans who believe people are smart enough to decide their fate on their own, and Democrats who think they are smart enough to decide for people.