Governor Hogan, legislative leaders press Congress for help stabilizing Obamacare market

March 07--Describing recent health insurance premium increases in Maryland as "unsustainable," Gov. Larry Hogan and the state's legislative leaders on Wednesday embraced the idea of a federal reinsurance program that would help offset the expense of the sickest patients.

In a letter to Maryland's mostly Democratic congressional delegation, the Republican governor said the state is working to address premium increases caused by "recent federal actions," but said the state has limited power to stem rate increases for the approximately 150,000 people buying private coverage through the Affordable Care Act, also known as Obamacare.

The letter comes as a bipartisan contingent in Congress is considering a federal reinsurance plan, which could potentially be attached to a must-pass federal spending bill later this month. The program would subsidize insurers with a high share of costly patients, mitigating the need for premium increases.

"We are appealing to you to help us contribute to the longer-term solution by passing federal legislation to create a pool for reinsurance," Hogan and other state leaders wrote. "Combined with state resources, that federal contribution could help us stabilize the individual market."

State Senate President Thomas V. Mike Miller and House Speaker Michael E. Busch, both Democrats, also signed the letter.

The political appetite in Washington for a federal reinsurance plan is unclear. On one hand, the idea has been embraced by Republican state leaders -- notably Wisconsin Gov. Scot Walker. Alaska, Minnesota and Oregon have approved similar state-based programs to curb premium costs.

On the other hand, President Donald Trump and some Republicans in Congress have shown little interest in "propping up" the Obamacare market or "subsidizing" insurers. Trump, who has repeatedly suggested Washington should "Let Obamacare fail," ended cost-sharing subsidies in October that insurance companies had previously used to lower premiums.

The letter from Maryland officials noted that decision, specifically, as a cause of premium increases in the state.

Maryland regulators approved average premium increases last year of just over 23 percent to nearly 50 percent, depending on the plan and the carrier. In their letter Wednesday, state officials said they expect the two carriers still offering coverage in the state's Obamacare marketplace to request increases of between 30 percent and 50 percent for 2019.

"This level of increase could have a devastating impact on what is already a shrinking market," the letter read.

The Affordable Care Act included a short-term reinsurance program that helped carriers make the initial transition. That effort, which ran from 2014 to 2016, was funded with a fee on commercial health insurance plans and was authorized to pay out about $20 billion over three years.

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