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Alaska reinsurance plan a model for ACA reform?

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An Alaskan grizzly at work.

Timothy Jost, writing in HealthAffairs, suggests that Alaska’s reinsurance plan could be a model for reform of the Affordable Care Act. Alaska has America’s highest healthcare costs.

Mr. Jost reports that on June 4,  the Alaska legislature passed a bill, expected to be signed into law, to rescue the  state health-insurance market. “The statute recreates Alaska’s high-risk pool ‘comprehensive health insurance fund,’ as a reinsurance fund to be financed through an appropriation of $55 million of the $64 million collected (for 2015) through an existing broad-based 2.7 percent premium tax on Alaskan insurers. Under the final bill, unlike earlier versions, the tax will not be collected only from health insurers, but will be collected from insurers generally.

“Although the statute does not specify how the money will be allocated, it is intended to reinsure high-cost cases covered by insurers. The specific conditions to be covered will be defined by regulation, but actuarial projections that identify likely cases were considered by the legislature. ”


He concludes: “As marketplace insurance premiums seem to be rising sharply in many states, Congress should consider extending the marketplace reinsurance program. Heavily subsidized reinsurance has worked well at keeping premium growth down in the universally popular Part D program and holds promise for stabilizing insurance rates in Alaska as well. It could work for marketplace plans generally.”

To read all of Mr. Jost’s  article, please hit this link.

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