Issue Briefs

Date of this Version

9-2017

Abstract

Subsidized reinsurance represents a potentially important tool to help stabilize individual health insurance markets. This brief describes alternative forms of subsidized reinsurance and the mechanisms by which they spread risk and reduce premiums. It summarizes specific state initiatives and Congressional proposals that include subsidized reinsurance. It compares approaches to each other and to more direct subsidies of individual market enrollment. For a given amount of funding, a particular program’s efficacy will depend on how it affects insurers’ risk and the risk margins built into premiums, incentives for selecting or avoiding risks, incentives for coordinating and managing care, and the costs and complexity of administration. These effects warrant careful consideration by policymakers as they consider measures to achieve stability in the individual market in the long term.

Document Type

Brief

Volume

21

Number

7

License

Creative Commons License
This work is licensed under a Creative Commons Attribution-No Derivative Works 4.0 License.

Keywords

reinsurance, healthcare, ACA, health policy

View On LDI Website

https://ldi.upenn.edu/brief/stabilizing-individual-health-insurance-markets-subsidized-reinsurance

 

Date Posted: 31 October 2017