Rethinking Reinsurance: Study Illuminates Tradeoffs of Popular Waivers

While reinsurance programs have become popular among states hoping to stabilize their individual insurance markets, a new study makes a compelling case that the premium reductions attributed to such programs may not be as helpful as they seem.

States can apply for and implement reinsurance programs via Section 1332 waivers, which allow them to waive certain Affordable Care Act rules in order to test marketplace innovations — provided they adhere to strict guardrails. Reinsurance works by subsidizing insurers’ highest-cost claims, allowing them to charge lower premiums overall.

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Leslie Small

Leslie Small

Leslie has been working in journalism since 2009 and reporting on the health care industry since 2014. She has covered the many ups and downs of the Affordable Care Act exchanges, the failed health insurer mega-mergers, and hundreds of other storylines spanning subjects such as Medicaid managed care, Medicare Advantage, employer-sponsored insurance, and prescription drug coverage. As the managing editor of Health Plan Weekly and Radar on Drug Benefits, she writes and edits for both publications while overseeing a small team of reporters who also focus on the managed care sector. Before joining AIS Health, she was a senior editor for the e-newsletter Fierce Health Payer, and she started her career as a copy editor at multiple local newspapers. She graduated with a dual degree in journalism and political science from Penn State University.

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