Four Democratic senators have introduced a bill that would make reinsurance a permanent part of the Affordable Care Act's individual exchanges.
The bill, introduced Wednesday and led by Sens. Tim Kaine of Virginia and Tom Carper of Delaware, would provide federal funding to cover 80% of claims from $50,000 to $500,000, starting next year, with the same level of support through 2020.
Beginning in 2021, the reinsurance program would kick in at $100,000.
In the current law, fees on all insurers that offer commercial plans, not just those in the individual market, paid into the reinsurance program. The funding was $10 billion in 2014, $6 billion in 2015, and $4 billion in 2016, when it ended.
When the reinsurance kicked in varied by the volume of reinsurance claims. In 2014 and 2015, it kicked in at $45,000; in 2015, it started at $90,000.
The fund covered all of the costs between $45,000 and $250,000 in 2014, but only 55.1% in 2015 and 50% in 2016.
According to the American Academy of Actuaries, somewhere between 4 to 7 percentage points of the 22% average increase in 2017 pre-subsidy premiums was due to the end of reinsurance.
The bill would also dedicate $500 million annually for the next three years to help states improve enrollment. Counties where there are fewer insurers would get priority for this funding.
"The only way to get healthcare right in this country is for both parties to work together on real solutions for all Americans," Kaine said in a statement announcing the bill. "This is just one way to improve affordability and choices for consumers and I look forward to working on additional solutions."
Both Carper and Kaine noted that Medicare's drug prescription benefit includes reinsurance as a part of its design.