States Take the Lead on Reinsurance to Stabilize the ACA Marketplaces
<p>Recent actions by Congress and the Trump administration are likely to disrupt the Affordable Care Act’s marketplaces in 2019, leading to higher premiums for individuals and families. In a new post on<em> To the Point</em>, the Commonwealth Fund’s David Blumenthal, M.D., Sara Collins, Shanoor Seervai, and Herman Bhupal discuss how reinsurance could help lower premiums and federal spending.</p><p>Reinsurance protects insurers by limiting their exposure to very high, unpredictable medical expenses incurred by their members. While it was a critical feature of the ACA marketplaces in their first three years, the reinsurance program was phased out by the health law, since it was assumed that insurers would gain enough experience to price their products with greater certainty.</p>
<p>Industry stakeholders and health policy experts have suggested that reinsurance could once again stabilize the individual market. The authors discuss several recent congressional bills featuring reinsurance, as well as states’ efforts to establish their own programs through the ACA’s innovation waiver program.</p>