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House Co-Sponsorship Memoranda

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House of Representatives
Session of 2019 - 2020 Regular Session


Posted: May 31, 2019 09:13 AM
From: Representative Bryan Cutler and Rep. Frank Dermody
To: All House members
Subject: State Based Exchange and Reinsurance Program
In the near future, we will be introducing legislation which will create an authority to operate a state-based health insurance exchange for Affordable Care Act individual market plans. The legislation will also permit the Commonwealth to apply for a Section 1332 State Relief and Empowerment waiver to create a reinsurance program to drive down premium increases in the individual market. The Trump Administration has provided greater flexibility and opportunities for states through such waivers.

As we know, states are the testing grounds of innovation and potential solutions to our everyday issues. President Trump on his first day in office issued an executive order to provide greater flexibility to States and cooperate with them in implementing healthcare programs. CMS followed that with new guidance for States seeking more flexibility through waivers. To date, CMS has approved 8 waivers. The reinsurance waivers offer states important tools to reduce premiums and stabilize the market.

The programs will not require any General Fund dollars. Once implemented, over 400,000 consumers should experience health insurance premiums 5-10% lower than what they otherwise would pay. The federal government is expected to fund 75% of the reinsurance programs costs. The remaining 25% of the costs are paid by the Authority. The Authority contribution will be generated by converting to a State-Based Exchange but continuing to assess a user fee that is equal to or less than the federal user fee.

The reinsurance program will allow insurers to price their products lower by limiting their exposure to very high, unpredictable medical expenses incurred by their members by covering some of those expenses when they exceed a certain threshold.

Please join us in co-sponsoring this legislation.

Introduced as HB3