Democrats’ bill would make reinsurance permanent for ACA exchanges

Legislation to establish a permanent reinsurance program for the Affordable Care Act (ACA) marketplace has been introduced by five Democratic senators.

The goal of the bill is to provide stability to the ACA exchanges and offer insurers additional incentive to participate in the exchanges by offsetting larger-than-expected claims. A reinsurance program was included in the ACA as one of several mechanisms to assist insurers in an untested market, but it was designed to be temporary, sunsetting in 2016 along with the risk corridor program.

“We must work together across party lines to help ease the burden of health care costs that are squeezing far too many hard-working Granite Staters and Americans,” said one of the bill’s co-sponsors, Maggie Hassan, D-New Hampshire. “This common-sense legislation will help lower premiums for middle class Americans and stabilize the individual market, which the Trump Administration has been working to sabotage.”

The bill is also sponsored by Sens. Tim Kaine, D-Virginia, Tom Carper, D-Delaware, Bill Nelson, D-Florida, and Jeanne Shaheen, D-New Hampshire.

If passed, the bill would cover 80 percent of insurer claims from $50,000 to $500,000 beginning in 2018. That level of support would be lowered in 2021, with a $100,000 claim required to receive reinsurance assistance.

The range and percentage of claims covered would differ from the original reinsurance program. When it began in 2014, it covered 100 percent of costs from claims between $45,000 and $250,000. In 2016, it covered only 50 percent of costs from $90,000 to $250,000.

The sponsors argued the extra funding for reinsurance would keep premiums lower, thus lowering what was being paid through the ACA’s Advanced Premium Tax Credit.

The bill would also provide $500 million annually between 2018 and 2020 to states to increase outreach efforts and boost exchange enrollment.