State Insurance Commissioner Proposes Law to Help Stabilize Health Insurance Market

Posted

State insurance commissioner Mike Kreidler has proposed legislation that he says will help provide stability to over 300,000 people to help them maintain coverage in Washington’s individual health insurance market.

The reinsurance program would encourage more health plan options in the 2019 individual market and would lower premium increases by up to 10 percent, according to his office. 

“Over the last year, the federal government has created substantial uncertainty in the individual health insurance market across the nation,” Kreidler said in a press release. “We’ve felt those effects in our state. A reinsurance program would help counter those negative effects and provide increased stability to a market that is a vital lifeline for so many consumers in our state.”

Reinsurance provides health insurers partial reimbursement for high-cost medical claims that exceed a certain threshold. The claims typically involve serious health issues like complications from diabetes, cancer, and premature births, among others.

The legislation — House Bill 2355 and Senate Bill 6062 — has been co-sponsored by Sen. Annette Cleveland, D-Vancouver, and Rep. Eileen Cody, D-Seattle. Both bills are scheduled for legislative hearings on Tuesday.

Last spring, Kreidler’s office began evaluating the potential measures for the individual market. 

“The need for a reinsurance program became evident after health insurers reduced coverage in Washington for 2018,” stated the release. “Nine counties ended up with just one option. Two counties had no options until Kreidler persuaded two companies to fill the gaps for this year.”



The program is estimated to cost $200 million a year with about one-fourth paid by the federal government. The proposal is modeled after a national reinsurance program that was in effect from 2014 to 2016.

“It lowered premiums for enrollees throughout the nation, including Washington,” stated the release. “The program also enabled more people to gain coverage and the state’s rate of uninsured dropped to 6 percent, more than a 50 percent reduction during that same period.”

The program would be similar to others in Oregon, Alaska and Minnesota. Over the last year, those states set up their own systems that include federal money to supplement state funds, according to the release. 

If the Legislature passes the legislation, it must then be approved by the federal Department of Health and Human Services. The bill sets a submission of the request to HHS by April 1, 2018. 

If approved, the new reinsurance program would go into effect statewide Jan. 1, 2019. 

The individual health insurance market represents approximately five percent of people enrolled in health plans in the state