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August 06, 2014 at 01:51 PM
Connecticut regulators say the new Patient Protection and Affordable Care Act (PPACA) reinsurance program should help health insurers in their state hold down rates in 2015.
A move by the U.S. Department of Health and Human Services (HHS) to lower the deductible, or “attachment point,” for the reinsurance program to $45,000, from $70,000, should cut individual major medical costs by about 4.5 percent, or $39.50 per member by month, according to Paul Lombardo, a department actuary.
Lombardo talks about the PPACA “transitional reinsurance program” in responses to several 2015 health rate filings.
In one, ConnectiCare Benefits Inc., an affiliate of ConnectiCare, asked for a 6.2 percent increase for 2015. Connecticut cut the increase to 3.1 percent.
The insurer said it thought the underlying increase in medical costs would be 3.84 percent. Lombardo knocked that down to 3.26 percent. The PPACA reinsurance program played a bigger role in shaping the insurer’s 2015 rates.
PPACA now prohibits issuers of PPACA-compliant coverage from using personal health information when deciding whether to issue coverage, and from using personal health information other than age and tobacco use when pricing coverage. PPACA drafters created the reinsurance program to protect issuers against the effects of those restrictions.
The reinsurance program is supposed to last for three years, then shut down. This year, the U.S. Department of Health and Human Services (HHS) is charging the issuers of all commercial health insurance, and the sponsors of all self-insured plans, a $63-per-person fee to fund the program.
