Funding Reinsurance And CSRs Would Lower Individual Premiums, Raise Enrollment - Insurance News | InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading INN Daily Newsletter Hot Off The Wires
Topics
    • Advisor News
    • Annuity Index
    • Annuity News
    • Companies
    • Earnings
    • Fiduciary
    • From the Field: Expert Insights
    • Health/Employee Benefits
    • Insurance & Financial Fraud
    • INN Magazine
    • Insiders Only
    • Life Insurance News
    • Newswires
    • Property and Casualty
    • Regulation News
    • Sponsored Articles
    • Washington Wire
    • Videos
    • ———
    • About
    • Meet our Editorial Staff
    • Advertise
    • Contact
    • Newsletters
  • Exclusives
  • NewsWires
  • Magazine
  • Newsletters
Sign in or register to be an INNsider.
  • AdvisorNews
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Exclusives
  • INN Magazine
  • Insurtech
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Video
  • Washington Wire
  • Life Insurance
  • Annuities
  • Advisor
  • Health/Benefits
  • Property & Casualty
  • Insurtech
  • About
  • Advertise
  • Contact
  • Editorial Staff

Get Social

  • Facebook
  • X
  • LinkedIn
Health/Employee Benefits News
INN Daily Newsletter Hot Off The Wires RSS Get our newsletter
Order Prints
December 6, 2017 INN Daily Newsletter Hot Off The Wires
Share
Share
Post
Email

Funding Reinsurance And CSRs Would Lower Individual Premiums, Raise Enrollment

New analysis by Avalere examines the impact of two market stabilization proposals—funding the cost-sharing reductions (CSRs) and implementing a federal reinsurance program—on individual market premiums and enrollment. As part of the debate over tax reform, Congress is discussing a proposal put forth by Senator Collins that would provide 2 years of reinsurance funding at $5B per year. Avalere estimates that level of reinsurance would reduce 2019 premiums by 4% and increase enrollment by 180,000 people (Table 1). According to Avalere, reinsurance helps protect insurers from high cost claims and, as a result, lowers premiums.

In addition to the reinsurance funding, Congress may vote on the legislation previously proposed by Senators Alexander and Murray, which would fund the CSRs. In combination, CSR funding and $5B in annual reinsurance could lower 2019 premiums by 18% and increase enrollment by 1.3M people. Avalere experts find that reinsurance funding would contribute to lower premium costs while in effect, but would have little effect on the market once funding expires. The current debate suggests reinsurance would only be funded for 2 years.

“Together, funding for reinsurance and paying the cost-sharing reductions would significantly reduce premiums,” said Chris Sloan, senior manager at Avalere. “However, those effects only continue as long as the federal funding keeps flowing.”

Avalere experts note; however, that these stabilizing effects could be overshadowed by the consequences of repealing the Affordable Care Act’s individual mandate, which is included in the Senate’s version of the tax reform bill. Consequences include increased premiums and reduced enrollment in the exchanges, according to estimates made by the Congressional Budget Office. Avalere’s modeling makes estimates relative to current law and does not assume the individual mandate is repealed.

“While funding reinsurance and cost-sharing reductions would help mitigate the impact of mandate repeal, eliminating the requirement to purchase coverage would create additional uncertainty in the market,” said Elizabeth Carpenter, senior vice president at Avalere. “As a result, it is important not to overlook the negative impact of repealing the individual mandate on long-term market stability.”

Table 1. Estimated Annual Impact of Reinsurance and CSR Funding on Individual Market Premiums and Enrollment, Relative to Current Law

Annual Reinsurance Amount Premium Reduction Change in Enrollment
2019 2020 2019 2020
Reinsurance Only
$2.5B -2% -2% 90,000 121,000
$5B -4% -4% 180,000 244,000
$10B -8% -8% 361,000 491,000
$15B -12% -11% 543,000 741,000
Reinsurance and CSR Funding
$2.5B -16% -16% 1,241,000 1,453,000
$5B -18% -18% 1,342,000 1,592,000
$10B -21% -21% 1,546,000  1,871,000
$15B -24% -24% 1,750,000  2,158,000

“Reinsurance is an effective policy solution, but it requires considerable federal funding to have a meaningful effect for consumers,” said Caroline Pearson, senior vice president at Avalere. “In order to substantially lower premiums, a reinsurance program would need more federal funding over a longer duration.”

Older

Global Fire Sprinkler Systems Market – Decline in Insurance Expenditure to Boost Growth| Technavio

Newer

CVS-Aetna Deal Has $2.1B Breakup Fee

Advisor News

  • Inflation, competing priorities and uncertainty erode retirement security
  • As health premiums rise, 1 in 8 workers cut retirement savings
  • CT governor’s candidates claims: What’s true, and what’s misleading
  • Retaining clients by giving them a memorable experience
  • Addressing the longevity paradox
More Advisor News

Annuity News

  • National Life Group expands annuity portfolio
  • AM Best to Join Life/Annuity Insurance-Focused Panel Discussion at Capitol Forum Event
  • USAA Earns No. 1 Ranking in JD Power Individual Annuity Study for the Third Consecutive Year
  • How flexible annuities fit today’s retirement portfolios
  • Foresters Financial appoints Tom Ross as chief distribution officer for U.S. annuity sales
More Annuity News

Health/Employee Benefits News

  • public notice
  • Review '27 Medicare coverage before plans renew
  • Univera’s coverage of Roswell Park highlights Medicare Advantage changes this year
  • MATSUI INTRODUCES BIPARTISAN LEGISLATION TO PROTECT PATIENT ACCESS TO AFFORDABLE MEDICATIONS
  • As feds cut key fee, Indiana Medicaid chief warns changes needed to avoid 'catastrophic situation'
More Health/Employee Benefits News

Life Insurance News

  • Security Benefit Announces Planned Dividend Rate Reset for Series B Preferred Stock
  • Palmetto Heritage and Atlantic Coast Life Announce Discussions Regarding Potential Acquisition
  • Jury finds insurance company acted in bad faith, awards Nebraska woman $11.3M
  • AM Best Affirms Credit Ratings of GIG Insurance – Egypt S.A.E.
  • Symetra Named to Fortune Best Workplaces For Women™ List for Fifth Consecutive Year
Sponsor
More Life Insurance News

NEWS INSIDE

  • Companies
  • Earnings
  • Economic News
  • INN Magazine
  • Insurtech News
  • Newswires Feed
  • Regulation News
  • Washington Wire
  • Videos

FEATURED OFFERS

Press Releases

  • Benefits Studio Launches to Fill the Missing Middle of Benefits Navigation at $49/mo
  • Lauren Sinnott Named to Ragan’s Top Women in Marketing Awards, Class of 2026 
More Press Releases > Add Your Press Release >

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Advisor News
  • Annuity Index
  • Annuity News
  • Companies
  • Earnings
  • Fiduciary
  • From the Field: Expert Insights
  • Health/Employee Benefits
  • Insurance & Financial Fraud
  • INN Magazine
  • Insiders Only
  • Life Insurance News
  • Newswires
  • Property and Casualty
  • Regulation News
  • Sponsored Articles
  • Washington Wire
  • Videos
  • ———
  • About
  • Meet our Editorial Staff
  • Advertise
  • Contact
  • Newsletters

Top Sections

  • AdvisorNews
  • Annuity News
  • Health/Employee Benefits News
  • InsuranceNewsNet Magazine
  • Life Insurance News
  • Property and Casualty News
  • Washington Wire

Our Company

  • About
  • Advertise
  • Contact
  • Meet our Editorial Staff
  • Magazine Subscription
  • Write for INN

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2026 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • InsuranceNewsNet Magazine

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.