Transitional reinsurance
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Transitional reinsurance was a program established under the Affordable Care Act that provided payments to insurers that enrolled individuals with relatively higher health costs. The program expired in 2016.
Overview
The transitional reinsurance program established by the Affordable Care Act (ACA) required most health insurers, including employers that self-fund health plans, to pay a fee to the federal government based on their enrollment figures for a plan year. The fee went toward payments to insurers providing plans on the individual market that covered high-cost individuals.[1][2]
According to the Henry J. Kaiser Family Foundation, the purpose of the program was to prevent premiums from rising too high to cover the cost of these individuals. The program expired in 2016. Due to the ACA's individual mandate and guaranteed issue provisions, insurers expected a flood of new consumers in the market, but were uncertain about the health status of the new enrollees. The transitional reinsurance program was intended to discourage them from setting high premiums due to this uncertainty.[1][2]
See also
- Obamacare overview
- History of healthcare policy in the United States
- Permanent risk adjustment
- Temporary risk corridors
External links
- Healthcare.gov glossary
- Kaiser Family Foundation, Explaining Health Care Reform: Risk Adjustment, Reinsurance, and Risk Corridors
Footnotes
