State-run reinsurance programs lowered Obamacare premiums: Study

By | March 14, 2019

State-run reinsurance programs lowered health insurance premiums by nearly 20 percent, according to a study released Wednesday that will aid Democrats seeking added funding for a federal reinsurance pool.

“For states looking to stabilize their individual markets, reinsurance programs may be an attractive opportunity,” said Chris Sloan, associate principal at Avalere Health, the consulting group that released the study. “State-based reinsurance programs have the potential to reduce premiums and are a good financial deal for states if they can identify a source of funding.”

Reinsurance programs reimburse insurers for high claims from very sick people, helping keep down premiums across the system.

Congressional Democrats have proposed funneling billions of dollars into reinsurance to shore up Obamacare and keep premiums low but have met resistance from Republicans.

Seven states, Alaska, Maryland, Maine, New Jersey, Oregon, Minnesota, and Wisconsin, have set up their own reinsurance programs using the Affordable Care Act’s “innovation Waivers.” Avalere found that those states saw premium reductions ranging from 6 percent to 43.4 percent. The study also found that the reinsurance programs saved the federal government about $ 1 billion in subsidies.

House Energy and Commerce Committee Chairman Frank Pallone, D-N.J., called Wednesday for boosting reinsurance. “We’d like to see a reinsurance program in place so that we can get more carriers into the system in some states that don’t have many,” Pallone said at America’s Health Insurance Plans’ National Health Policy Conference. “And also give money back to states to help people pay for their deductibles and copays.”

Healthcare