March 6, 2018
ACHP Polling Shows Nationwide Interest in Reinsurance to Bring Down Premiums, Stabilize Markets
Washington, D.C. – New polling released by the Alliance of Community Health Plans (ACHP) shows that Americans are overwhelmingly in favor of a national reinsurance program to reduce insurance premiums for health care coverage. Additionally, respondents say they are even more inclined to support a national reinsurance program after hearing about successful examples from state-level programs in Alaska, Minnesota and Oregon.
“It’s clear that value is a top health care issue for Americans,” said Ceci Connolly, President and CEO of ACHP. “People want action – they want leaders from both parties to come together to provide some certainty that affordable health care options will be there when they need them. We urge Congress to enact reinsurance legislation to ease the pain on Americans’ pocketbooks and stabilize the market.”
Offsetting high cost claims through reinsurance is a well-established mechanism used in commercial policies and Medicare Part D. Reinsurance serves the dual purpose of shielding consumers from potential premium increases as well as protecting health plans against unanticipated losses from complex and costly claims. Reinsurance has effectively served consumers in exchange coverage and Medicare prescription drug coverage.
Conducted for ACHP by Morning Consult, the poll indicates not only broad support for a national reinsurance program, but the majority of Americans surveyed say a national reinsurance program will reduce insurance premiums.
Health plans are already developing products and setting rates for the 2019 individual market. As underlying health costs such as prescription drugs continue to rise, it is critical Congress take steps to help control rising premiums. Pending reinsurance legislation would provide funding and flexibility for states to develop programs that best meet their needs. State reinsurance programs would add market certainty for insurers and reduce premiums set to be finalized this summer.
Seventy five percent of Americans polled say Congress should play a role in helping states stabilize insurance markets in order to lower premiums for their residents. And across the board, adults are in favor of bipartisan efforts to establish a national reinsurance program – with 70 percent indicating Republicans and Democrats in Congress should work together on this effort.
“We appreciate Congressional leaders for developing pragmatic reinsurance proposals to stabilize the market and give consumers some certainty,” said Connolly. “Americans need premiums they can afford. Now is the time to act.”
Alaska, Minnesota, and Oregon were all granted 1332 Innovation Waivers by the federal government to develop reinsurance programs designed to meet the specific needs of their residents. And while the details vary, they share a critical common element—reinsurance that helps states pay the most complex claims while keeping health premiums from soaring.
Morning Consult conducted online surveys of approximately 2201 adults nationally from February 23-25, 2018. Results from the full survey had a margin of error of +/- 2%.
The Alliance of Community Health Plans (ACHP) is a national leadership organization bringing together innovative health plans and provider groups that are among America’s best at delivering affordable, high-quality coverage and care. ACHP’s member health plans provide coverage and care for more than 19 million Americans across 30 states and the District of Columbia. These organizations focus on improving the health of the communities they serve and are on the leading edge of innovations in affordability and quality of care, including primary care redesign, payment reform, accountable health care delivery and use of information technology. To learn more, go to www.achp.org and follow ACHP on Twitter @_ACHP.
Reinsurance programs have proven successful in the following three states:
Alaska: Alaska passed legislation in 2016 creating the Alaska Reinsurance Program (ARP) and was the first state to receive a section 1332 approval for reinsurance. The legislature also appropriated $55 million to fund the program in 2017. Due to the ARP, Alaska’s premiums increased just 7 percent rather than the expected 40 percent rise. (Source: Alaska Insurance Commissioner Testimony to Senate HELP 9/6/17).
Minnesota: Due to Minnesota’s reinsurance program, premiums have been reduced for all consumers in Minnesota’s individual market by an average of 20 percent. (Source: Minnesota Commerce Department).
Oregon: Based on the best estimate assumptions, in 2018, the waiver reduces premiums by 7.5 percent (net of a 0.3 percent assessment), increases non-group enrollment by 1.7 percent, and creates $32.9 million in federal savings (which incorporates APTC savings net of other federal revenue). (Source: Oregon 1332 Waiver Application).