To Curb Rising Health Insurance Costs, Some States Try ‘Reinsurance Pools’
So far, so very good. In its first year, the reinsurance pool has performed even better than expected. According to the
Reinsurance has long had a place in the private insurance market.
Essentially, it entails insurance companies taking out their own insurance to protect themselves when they are hit by an unexpectedly high claim, "like when somebody needs a heart transplant or a liver transplant or something else where costs are over, say,
A public health reinsurance plan works the same way, except the state reimburses insurers for claims that climb above a certain set figure, depending on the plan.
In
"We were taking it on the chin. We were really in crisis," O'Toole said. "This has provided immediate and positive results."
But the fix in
"
That is why O'Toole and many other state officials want the federal government to help fill state reinsurance pools.
Health policy analysts say the situation has only grown more pressing in recent months.
In December,
There were two bipartisan bills in the
Avalere, a health policy research firm, estimated that the measure pushed by Collins and Nelson would have reduced 2019 premiums by 4 percent and increased enrollment in Affordable Care Act plans by 180,000. Not surprisingly, the bill had the strong support of the health insurance industry.
Although the
At the same time, many left-leaning analysts say public reinsurance is yet another cumbersome solution to a fractured health care system that should be replaced by a single-payer model.
The Affordable Care Act set up a federal reinsurance pool to compensate insurers for taking on high-risk beneficiaries (who, under ACA provisions, could not be charged higher premiums than anyone else). The law set aside
States that want to establish their own reinsurance pools with some federal money must apply for a waiver from the
In their applications to create reinsurance pools, states have argued that by reducing premiums, they will save the federal government money because it will have to pay less in tax credits for low-income policyholders.
In February Wisconsin enacted a
In
But some financially strapped states simply don't have the money to set up reinsurance pools. In 2018,
Not all states can afford to do that, said
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