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Proposed State Reinsurance Program Could Stabilize Health Insurance Market

Ted S. Warren
AP Photo
Washington state Insurance Commissioner Mike Kreidler

Premiums for health insurance plans in Washington state went up by an average of 36 percent this year. Those rates could rise even higher after the recent repeal of the individual mandate in the Affordable Care Act.

State Insurance Commissioner Mike Kreidler is introducing a plan, known as a "reinsurance program," that he hopes will stabilize the market for counties across Washington. He says it works as insurance for insurance companies.

It provides them with a partial reimbursement for high-cost medical claims that exceed a certain threshold, which is meant to incentivize insurance companies into keeping premiums lower.

Kreidler says he wants the new program in place for 2019, but that means the legislature needs to move quickly in its short, 60-day session.

"It's not easy. I'll be the first one to admit that. But it's something well worth making the effort," he said. "There's just too much at stake. Too many people out there that are really dependent on their health insurance and their individual markets."

Kreidler says he knows this approach will work because a reinsurance program was included in the Affordable Care Act when that law first went into effect. He expects the state's program will come with a $200-million price tag.

About a quarter of that cost could be covered by the federal government through a waiver. This proposed program can't even be created if the state doesn't get that waiver.

The remaining funds would come from premiums already paid by individuals with coverage through large businesses that self-fund their insurance, as well as smaller employers that have banded together to purchase coverage for workers.

There has been some pushback on that plan. Kreidler has said he's willing to find alternative funding.

Ariel first entered a public radio newsroom in 2004 while in school at Bradley University in Peoria, Illinois. It was love at first sight. After graduating from Bradley, she went on to earn a Master's degree in Public Affairs Reporting from the University of Illinois at Springfield. Ariel has lived in Indiana, Ohio and Alaska reporting on everything from salmon spawning to policy issues concerning education. She's been a host, a manager and now rides shotgun with Kirsten Kendrick as the Morning Edition producer at KNKX.