Insurance Reform in Virginia

Free-market reforms are hard to come by this year, but there’s just been a small victory for economic freedom and individual rights in Virginia. A bill enabling Virginia companies to offer life insurance benefits to people their employees choose, including same-sex partners, was passed overwhelmingly by the legislature in April. My friend Kelly Young discovered three years ago that Virginia law prevented his employer’s insurance company from selling him group life insurance on his partner. The company did offer such insurance in other states. As the Washington Blade reports:

Previously, state law permitted Virginia residents to take out group life insurance coverage only for a legal spouse or a child under age 25. But the new statute, which takes effect July 1, broadens that group of people to include anyone with whom a Virginia resident has [an insurable] interest, including a same-sex partner.

The bill, introduced by Del. Adam Ebbin (D), did not even get out of committee in 2008 and 2009, despite a ringing editorial endorsement by the conservative Richmond Times-Dispatch and the support of Virginia FREE, the state’s most effective business association. This year, perhaps because of the addition of a Republican, Del. Tom Rust, as chief sponsor, it moved smoothly through both houses. Gov. Robert McDonnell, who has come in for criticism in these parts, commendably signed the bill.

As the Times-Dispatch editorialized two years ago:

Note well what this bill is not: a mandate. Insurance companies would not be required to cover anybody they did not wish to. They would remain free to reject coverage they did not care to offer. They simply would not be prohibited from covering persons they are willing to cover.

In a free market, that is precisely how insurance ought to work: The buyer and the seller of the policy work out the terms between themselves. The state’s job is merely to enforce the contract — not to write it. Ebbin’s bill deserves a resounding and unanimous aye.

It took two more years, but at long last Virginia’s legislators have legalized this particular capitalist act among consenting adults. In this case, it’s likely to be same-sex couples who will benefit most from the removal of this barrier to commerce. Just another little step toward equality under the law.