Cutting, killing or postponing contributions for a new federal reinsurance program could increase individual health premiums later.
Joyce Bohl, an actuary, briefed state lawmakers on that, premium control options and others over the weekend.
The Obama administration has been trying to help consumers keep health insurance coverage written before Patient Protection and Affordable Care Act underwriting rules took effect.
Expanded grandfathering could slow the flow of young, healthy consumers into the new, PPACA-compliant “metallic products,” Bohl told the lawmakers at a National Conference of Insurance Legislators meeting session on PPACA, according to a written version of her presentation.
The more grandfathering the administration allows, and the longer it lasts, the higher the metallic product premiums will be, Bohl said.
Bohl – a member of the federal health committee at the American Academy of Actuaries – said regulators could hold down health insurance rates by cutting the amount of cash carriers have to contribute to one of the PPACA risk-management programs.
Current federal regulations call for insurers to contribute $63 per enrollee into the PPACA reinsurance fund in 2014 and $44 in 2015.
Regulators recently let self-funded, self-administered health plans put off paying the reinsurance fee for two years.
A broad reduction in reinsurance program contributions could ease pressure on premiums marketwide at first, then continue to hold down costs in the group market, Bohl said.
But the move could increase costs in the individual market, by exposing insurers in that market to more risk, Bohl said.
“Will there be enough money to pay the reinsurance recoveries?” Bohl wondered.
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