Federal regulators say a big new government health reinsurance program, or insurance program for insurers, has enough money to pay health insurers more than it had promised.
But a securities analyst says the news will do little to help health insurer stocks, because insurers were already counting on the program to be fully funded.
For agents and brokers in the commercial market, continuing uncertainty about the Patient Protection and Affordable Care Act (PPACA) reinsurance program and two other PPACA risk-management programs means that the stability of the commercial health insurance market is still in doubt.
The news
The Center for Consumer Information & Insurance Oversight (CCIIO) announced Wednesday that the reinsurance program has enough cash to pay 100 percent of eligible reinsured claims costs.
What’s CCIIO?
CCIIO is the division of the U.S. Department of Health and Human Services (HHS) in charge of running the PPACA programs that affect the commercial health insurance market.
What’s new about the news?
Originally, program managers had promised to pay just 80 percent of the cost of non-grandfathered individual market claims above an “attachment point,” or reinsurance deductible, of $45,000, and below a cap of $250,000.
The program was supposed to help health insurers cope with the possibility that the new PPACA product design and pricing rules could lead to a flood of patients who needed organ transplants and expensive medications. Some insurers have reported that 2014 claims were extremely high, and that many of the people who gained insurance under the new rules had conditions such as hepatitis C and HIV.
See also: Just how sick are exchange plan enrollees?
CCIIO officials did not give any information in the memo about how many PPACA reinsurance claims they have received, or how much money insurers have been seeking through the program.