Legislation calls for reinsurance program to aid people with extremely high health insurance premiums

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Lawmakers have introduced legislation this week that would create a reinsurance program to help lower the cost of premiums for Delawareans who do not get insurance through their employers.

House Bill 176, which has no Republican co-sponsors, would stabilize the individual health insurance market and help Delawareans struggling with extremely highhealthcare costs to get relief, a release from House Democrats stated.

The bill, based on Delaware’s Section 1332 Waiver application, is enabling legislation that establishes and funds a reinsurance program to cover the high cost of premiums for individual market plans.

Delaware is further affected by a lack of health insurers for its individual plans for those without company coverage, with Blue Cross the only insurer.

More heavily populated states, in some cases, have seen more competition.

“The high cost of healthcare is all-consuming, forcing our small business owners, seniors and everyday Delawareans to make difficult decisions with their health. It’s a cycle that will continue, but this legislation lays out an action plan to help consumers. I commend the work of the elected officials, Department of Health and Social Services and Department of Insurance for their leadership on these strategies, and hope that we can approve and pass this important measure,” said House Speaker Pete Schwartzkopf, D-Rehoboth Beach, chief sponsor of HB 176.

States across the country have pursued such Section 1332 Waivers, which are options within the Affordable Care Act that allow states to modify and address healthcare affordability under the health law. These waivers require approval from the federal government in order to be enacted.

According to the National Conference of State Legislatures, eight states have filed waivers and received approval, while 11 states have 1332 waiver laws in place.

Delaware’s waiver application supports the creation of the Delaware Health Insurance Individual Market Stabilization Reinsurance Program & Fund to reinsure expensive claims. Authorized by HB 176, this initiative would impact individuals and families who do not qualify for Medicaid or tax credits through the ACA marketplace, meaning those who purchase insurance through the marketplace, through a broker or from an insurance carrier directly.

The projected goal is to reduce health insurance premiums for this population by 20 percent, and increase enrollment on the individual market by 3.2 percent.

This reinsurance program would be administered by the Delaware Health Care Commission, and would not impact the state budget. The majority of the program would be funded through federal dollars, but there would be a 2.75-percent tax on insurance carriers, based on the carrier’s premium tax liability, to further support the fund.

Delaware’s 1332 Waiver Application is currently out for public comment. Consumers can submit comments or attend public hearings to voice their thoughts. Once finalized, the application will be submitted to the federal government.

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