For Consumers

Kreidler urges revival of reinsurance program to reduce health premiums

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April 14, 2020

OLYMPIA, Wash. – Insurance Commissioner Mike Kreidler is urging Congress to reinstate a federal reinsurance program to reduce the rise of health insurance premiums. 

In a letter to Washington state’s congressional representatives, Kreidler said reinsurance that was part of the Affordable Care Act (ACA) from 2014 through 2016 resulted in premiums that were 10% to 15% lower than they would have been without the program. 

The program reduced rate increases for individuals who bought plans through the individual health insurance markets in the United States, including over 250,000 in Washington.  

“I continue to believe that reviving the federal reinsurance program is the most important step that Congress could take to maintain and increase the stability of our individual market,” Kreidler wrote. “With the massive impacts of the COVID-19 pandemic on businesses and their employees, the individual health insurance market’s role as a safety net is even more critical.”

The individual health insurance market is a crucial safety net for self-employed individuals, people who do not have health care coverage through their employer, people who are between jobs, and early retirees. 

Reinsurance provides health insurers partial reimbursement for high-cost medical claims that exceed a certain threshold. These type of claims typically involve extremely serious health issues, such as cancer, complications from diabetes and pre-mature births, among others.

In 2018, Kreidler proposed legislation to establish a state-based reinsurance program modeled on the ACA but it did not pass. 

“Now we have the opportunity to help provide greater predictability and stability during these uncertain times,” Kreidler said. “We need Congress to restore a program that has a proven benefit to consumers."