Tuesday, May 3, 2016
New ACA Study: Mercatus Center
"The ACA established the reinsurance program to assist insurers offering ACA-compliant plans so insurers could charge lower premiums and attract more enrollees as the law’s changes took effect. These payments are an explicit subsidy benefitting individual market ACA-compliant plans financed by fees on nearly everyone with private insurance.
Prior to insurers setting their 2014 premiums, the Department of Health and Human Services (HHS) announced that it would pay insurers 80% of the cost of claims incurred by enrollees between $60,000 and $250,000. As an example, an insurer could expect to receive a payment of $112,000 for an enrollee with $200,000 in claims ($200,000 − $60,000 = $140,000 x 0.8 = $112,000). The Congressional Budget Office estimates that insurers were able to reduce premiums by 10% in 2014 because of expected reinsurance payments. "
Read the rest here: