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Virginia Health Exchange Profile


Establishing the Exchange

On December 14, 2012, Governor Bob McDonnell (R) informed federal officials that Virginia would not continue to plan for a state-based health insurance exchange.

Prior to the decision, Governor McDonnell had signed HB 2434 into law declaring the state’s intent to establish a state-based health insurance exchange. The legislation was based on a recommendation by the Virginia Health Reform Initiative Advisory Council, housed within the Virginia Department of Health and Human Resources. HB 2434 required the Governor to submit recommendations regarding establishment of an exchange in Virginia for consideration during the 2012 session of the General Assembly and prohibited qualified health insurance plans offered through the exchange from covering abortions, except in cases of rape, incest, or life endangerment of the pregnant woman.

On November 25, 2011, the Advisory Council’s exchange recommendations were submitted to the General Assembly by the Governor. The Council voted in favor of establishing a state-based exchange as a quasi-governmental agency with a governing board. However, Governor McDonnell opposed passing the additional legislation needed for the establishment of a state-based exchange until after the Supreme Court ruled on the Affordable Care Act (ACA) in late June 2012. Numerous bills to establish a state-run health insurance exchange were introduced in the Virginia Legislature in 2012; however, all were tabled for the next legislative session. In the absence of establishment legislation, the Advisory Council temporarily suspended its meetings.

Contracting with Plans: On February 14, 2013, Governor McDonnell sent a letter to the Center for Consumer Information and Insurance Oversight (CCIIO) announcing the state’s intent to perform plan management activities despite not having entered into a state-federal partnership exchange. On March 21, 2013 Governor McDonnell approved legislation authorizing the State Corporation Commission (SCC) to perform plan management functions, including collecting and analyzing information on plan rates, benefits, and cost-sharing and ensuring continued plan compliance. The SCC was also granted the authority to manage consumer complaints, provide technical assistance, and decertify issuers. The legislation authorizes the Virginia Department of Health to assist in plan management functions. Premium rates will vary based on family composition, age, tobacco use, and geographic area. Virginia will have 12 geographic rating areas, determined by the federal default mechanism.

Consumer Assistance and Outreach: In April 2013, Governor McDonnell signed into law HB 2246 and SB 1261 to prohibit navigators from performing activities that would require an insurance agent license. Navigators must be selected in accordance with federal law and may not act as intermediaries between employers and insurers offering QHPs or dental plans through the Exchange. The SCC will monitor Navigator activities and submit findings to the Governor and the Senate and House Commerce and Labor Committees in November of 2014 and 2015.

Information Technology (IT): Virginia is focusing on a significant Medicaid IT system upgrade and has received approval from the Centers for Medicare and Medicaid Services (CMS) for an enhanced federal match. In May 2012, the state released a Request for Proposals soliciting subcontractors to streamline eligibility and enrollment for all existing social service benefits, including Medicaid, TANF, and food stamps. State officials envision eventual interoperability between the upgraded system and an exchange.

Essential Health Benefits (EHB): The ACA requires that all individual and small-group plans sold in a state, including those offered through the Exchange, cover certain defined health benefits. States must decide whether to benchmark their EHB plan to one of ten plans operating in the state or default to the largest small-group plan in the state. Drawing input from multiple stakeholders and various analyses, the Advisory Council recommended in June 2012 that a subcommittee be established to consider Anthem, the state’s small-group PPO as the state’s benchmark plan. The subcommittee recommended Anthem as the EHB benchmark plan and the Children’s Health Insurance Program (CHIP) dental benefit plan (Smiles for Children) as the pediatric dental supplemental plan.

Exchange Funding

In September 2010, the Virginia State Department of Medical Assistance Services received a federal Exchange Planning grant of $1 million. The state planned to submit a Level One Establishment grant application in June 2012; however, the Governor announced in a letter to the Legislature in July, he decided not to submit the application. In February 2013, Virginia received a $4.3 million Level One Establishment grant to support plan management functions, including hiring IT consultants and engaging stakeholders. In July 2013, Virginia received a second Level One Establishment grant for $1.2 million to fund the actuarial analysis needed to support the certification, decertification, and recertification of QHPs and stand-alone dental plans.

Virginia, along with nine other states, received technical assistance from the Robert Wood Johnson Foundation through the State Health Reform Assistance Network; this assistance includes help with setting up health insurance exchanges, expanding Medicaid to newly eligible populations, streamlining eligibility and enrollment systems, instituting insurance market reforms and using data to drive decisions.

Next Steps

On March 29, 2013, Virginia received approval from CCIIO to perform plan management activities. The federal government will retain control over all other Exchange functions.

More information about the Advisory Council’s health insurance exchange activities can be found at:

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