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Doctor’s Note: Reducing Your Health Insurance Cost

Updated: Sep 13, 2019

Don’t believe everything you read on Facebook, there’s lots of misinformation. Like President Barack Obama, I too am a fan of the quote, “You are entitled to your opinion. But you are not entitled to your own facts” by Daniel Patrick Moynihan.

I carried legislation the last two years to allow membership organizations to be an umbrella for smaller businesses to group together in order to buy health insurance. Buying health insurance in bulk is the best deal going. Right now, the government restricts that privilege to large employers.

Groups of business owners in a shared industry like realtors ought to be allowed access to similar savings by pooling their numbers through their membership organizations. Where you work shouldn’t dictate your access to lower cost insurance. This just makes sense.

There are three insurance marketplaces. The regulations and structure of the plans vary between the three.

Large group plans are only for businesses with over 200 employees and have the most competition, the lowest costs and the best benefits package. Large numbers of employees allow for economies and efficiencies, and fewer regulations allow for innovation.

Small group plans are less efficient, more regulated but still have some savings from grouping people together.

The individual marketplace is a combination of people who are receiving subsidies from the federal government and those who are buying their own insurance. Small businesses with less than 10 employees or employees of businesses who can’t afford to offer insurance buy here. These plans have the least competition, fewest options and the highest costs and deductibles.

AHPs are just like the large groups plans but instead of grouping together by employment you are grouped together by a membership organization. If you think that’s junk insurance, ask your friends who work at Capitol One and Altria. My patients with large group insurance have some of the best coverage and lowest out-of-pocket costs. They love their plans.

AHPs aren’t new, there are two in Virginia, the Bankers Association and the Independent Colleges. They have been in place for years. My patients in these plans also love their coverage.

Furthermore, the large group plans and the existing AHPs are NOT required to offer the ACA existing health benefits or cover pre-existing conditions, but they do anyway. With the leverage of a large group, the private sector has worked out discounts and efficiencies to get the best, most comprehensive plans. No government regulation was needed. That’s why I didn’t think the requirement was needed in the bill.

My bill, Senate Bill 1689 had strong, BIPARTISAN support.

I AGREED to the Governor’s amendments to require pre-existing conditions and the essential health benefits in the new AHPs.

Instead of those amendments, the Governor sent a substitute filled with amendments that had never been discussed.

  • The substitute took away sole proprietors ability to buy insurance in the group marketplace. Families would lose their health insurance and be forced to get new, more costly plans.

  • The substitute added so many regulations that it essentially negated the ability to negotiate efficiency and savings.

With STRONG BIPARTISAN support and frustration, the substitute was rejected by the Senate and the Governor later vetoed the original bill.

When small businesses can offer the same kind of benefits as larger companies and lower administrative costs, it frees up capital to allow businesses to grow and hire more workers.

The cost savings are real.

Someone who leaves a small business group insurance to join an AHP saves on average $3000 a year on premiums.

If they leave the individual marketplace, the average savings is $10,000 a year.

This is real money for families and small businesses who are the most vocal advocates for this option. They want to provide health insurance for their employees but can’t afford it.

The Governor has not offered any solutions, despite good-faith compromises.

What the Governor is saying is that it’s ok for families who are overpaying by up to $10,000 to have no other option.

Competition lowers costs and improves products. The government shouldn’t pick winners and losers by imposing bad regulations and decreasing competition. Increasing competition is one of the most effective tools we have to lower the cost of healthcare and health insurance.

This is not a radical new idea, it’s a proven, popular, cost-effective health insurance alternative. This is the kind of legislation that makes sense. It saves money, it helps small business and keeps more money in the pockets of Virginia families. Aren’t you tired of the kind of politics that blocks sensible innovation?

It’s time to stop saying “no” to everything. These are real problems. Let’s work together to fix them. The Senate and the House did. Why won’t the Governor?



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