Feds Approve Virginia Individual Market Reinsurance Program
HHS and the Treasury Department on May 19 approved Virginia’s waiver for a state reinsurance program starting on Jan. 1, 2023. Although states have been less aggressive when it comes to applying for reinsurance programs recently, the looming expiration of enhanced premium tax credits in the individual marketplace could create renewed interest in reinsurance, policy experts tell AIS Health, a division of MMIT. That would be welcome news for insurers who are in favor of such programs because they incentivize more individuals to enroll in plans, create a more balanced risk pool and help insurers deal with large claims.
Reinsurance programs are primarily focused on lowering premiums for individuals who did not previously qualify for subsidies on the Affordable Care Act exchanges. In early 2021, the American Rescue Plan Act (ARPA) made enhanced subsidies available to people whose incomes are above 400% of the federal poverty level, the previous threshold, leading to a smaller number of people who benefited from reinsurance.