The Health 202: The Trump administration is helping to drive down Obamacare costs
The Trump administration has been getting slammed for trying to sabotage Obamacare. But there’s a key way it has been working behind the scenes to lower health insurance premiums.
Seven states have obtained permission from the Centers for Medicare and Medicaid Services to divert some federal dollars from insurance subsidies to what’s known as reinsurance, which you could think of as insurance for insurers. Reinsurance programs help insurers cover the costs for their most expensive patients, thus allowing them to lower overall monthly premiums for everyone.
CMS has approved reinsurance programs this year for Maryland, Wisconsin, Maine and New Jersey. The agency gave similar go-aheads to Minnesota, Oregon and Alaska last year. These states are reporting some of the biggest premium reductions for the 2019 Affordable Care Act marketplaces, which open for enrollment on Nov. 1. That’s welcome news to Americans relying on marketplace plans that saw massive price spikes in recent years.
Alaska, for example, says its premium rates have decreased 25 percent since the reinsurance program began. Monthly premiums in the individual market will cost an average of $770 in 2019 compared to an average of $1,043 in 2017, the state announced in August. Average “silver”-level premiums in New Jersey are down 14.7 percent, to $289 per month, per data released last week by CMS.
Health care is a huge topic in this year’s midterm campaigns. But you won’t hear Democratic and Republican candidates mentioning the wonky topic of reinsurance in these remaining few weeks. But reinsurance is a great — and rare — example of the bipartisan solutions that exist in the health policy universe.
Maryland offers the most recent — and the most dramatic — example. After several years of massive premium hikes, Democratic and Republican state lawmakers worked with Republican Gov. Larry Hogan last spring to create the largest reinsurance program yet, one that independent actuaries say is causing next year’s individual market premiums to drop anywhere from 7.4 to 17 percent.