One of the successes of the Affordable Care Act was the development of the health insurance Marketplace. States can have can have a significant impact on what the premiums are on their state’s Marketplace plans by using some of the policy tools available in the ACA.
For example, Section 1332 waivers in the ACA allow states to implement innovative market driven solutions to lower premiums and protect coverage at the same time. The goal of Section 1332 waivers is to allow states to experiment with alternative payment and delivery models.
Recent CMS guidance changed several components of the 1332 waiver processes including allowing executive orders or state regulations to pursue 1332 waivers.
Many states have recently taken administrative action to lower the Marketplace premiums in their states by implementing reinsurance waivers. Reinsurance programs allow states to reimburse insurers for certain high-cost claims, allowing them to lower premiums overall. In essence, reinsurance (insurance for insurance) creates a backstop for insurers for super-expensive claims – which makes insurance for everybody more affordable.
So far this year, CMS has approved Section 1332 reinsurance waivers in Alaska, Hawaii, Maine, Maryland, Minnesota, New Jersey, Oregon, and Wisconsin. There are reinsurance waiver applications pending in Colorado (following their passage of HB 19-1168) and North Dakota (following their enactment of HB 1106).
More 1332 waiver applications are on the way too. Delaware, Montana, and New Mexico enacted legislation authorizing reinsurance 1332 waiver applications – so those waiver applications should be on the way in the near future. Maryland passed HB 1098 which authorizes (but doesn’t require) their state to submit a 1332 reinsurance waiver by January 1, 2020.
Basically, 1332 waivers offer states the opportunity to implement reinsurance waivers that have a direct and beneficial effect on Marketplace premiums that benefit their residents. Seems like a no-brainer in terms of smart public policy.
Will Arizona be next in line to seek a reinsurance waiver to help reduce Marketplace premiums in AZ?