Abstract
This analysis compares the design of section 1332 reinsurance policies across states based on their potential for reducing insurer risk exposure and likely level of government spending.
Highlights
States have received approval from the Centers for Medicare & Medicaid Services to operate publicly financed reinsurance programs through section 1332 state innovation waivers.[1]
Author affiliations and article information are listed at the end of this article
We examined 2 metrics for each program: (1) total government spending on reinsurance claims and average insurer liability, and (2) insurer risk exposure, measured by the coefficient of variation—the standard deviation divided by the mean of per-enrollee insurer liability
Summary
States have received approval from the Centers for Medicare & Medicaid Services to operate publicly financed reinsurance programs through section 1332 state innovation waivers.[1] Reinsurance— insurance for insurers—protects insurers from the risk of unusually high enrollee spending.[2] Publicly financed risk protection for insurers can both promote insurer participation in markets and reduce their incentives to avoid high-risk enrollees.[3] In this study, we compare the design of section 1332 reinsurance policies across states based on their potential for reducing insurer risk exposure and likely level of government spending. Author affiliations and article information are listed at the end of this article
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