A major Affordable Care Act training wheels program for health insurers will be a little less generous for 2015 than it has to be, according to federal ACA regulations, but much less generous than the program was for 2014.
Officials at the Center for Consumer Information & Insurance Oversight have described how the program, the ACA reinsurance, will work for the 2015 benefit year in a memo posted late Friday.
The ACA reinsurance program will pay 55.1 percent of the eligible insurer costs for 2015, center officials say in the memo.
The U.S. Department of Health and Human Services, the center's parent, said when it set up the reinsurance program that the program would pay 50 percent of the covered health insurer costs for 2015.
For 2014, however, the reinsurance program paid 100 percent of covered insurer costs, after the department said the program would pay just 80 percent of covered costs for 2014.
The ACA eliminated or limited most of the defenses, such as refusals to sell coverage to people with heart disease or diabetes, that health insurers once used to protect themselves against claim risk. Many of the ACA limits on insurers' defenses took effect in January.
Reinsurance protection
To persuade insurers to continue to write individual health insurance in 2014 and later years in spite of the rule changes, ACA drafters include three "risk management" programs.
The reinsurance protection is supposed to use a broad-based fee on most coverage providers to help issuers of individual coverage pay the bills for enrollees who suffer catastrophic losses in 2014, 2015 or 2016.
