Maryland Health Benefit Exchange managers are starting to figure out how to use a new, temporary, $20 billion federal reinsurance program.
The exchange hopes to get $194 million in Transitional Reinsurance Program cash for 2014, and total of $390 million over three years.
Managers will divvy up the cash in the next few weeks, in time to help carriers build the reinsurance payments into their 2015 rate proposals.
Michele Eberle and Rebecca Pearce detailed the program in a presentation for the exchange board.
Fully insured and self-insured plans will fund the program with an assessment of $5.25 per member per month.
Agencies “will begin true operations of [the] program in April 2014,” Eberle and Pearce said.
Maryland is keeping its individual and small-group risk pools separate, and the reinsurance program would have no direct effect on the state’s group health market. But the program could affect whether the state’s individual commercial health insurance market survives PPACA, and how easy it is for employers to send workers to get coverage in the individual market.
The program also could affect how much individual health coverage costs, officials said.
The Centers for Medicare & Medicaid Services using a comparable program to try to protect the carriers in the Medicare Advantage market against adverse selection.
Eberle and Pearce said the Maryland exchange is working with a consulting firm to understand how to set up the reinsurance program and hiring an actuarial consulting firm to analyze how the insurance market might work.
The exchange is also studying how the reinsurance program will work at the federally run exchanges.