Kreidler, Cody, and Cleveland call on Congress to revive federal reinsurance program

Washington State Insurance Commissioner Mike Kreidler sent a letter to the state’s federal delegation last month calling on Congress to reinstate the federal reinsurance program. In the letter, Kreidler says that while he has recommended reinstating the program since 2017, the impact of the COVID-19 pandemic has made supporting the individual health insurance market even more critical.

The federal reinsurance program essentially capped health insurers’ liability for their highest cost cases by paying a portion of claims costs above a certain threshold. Through the Affordable Care Act, between 2014 and 2016 the federal reinsurance program reduced individual market premiums in Washington by between 10-15%, says Kreidler.



In the letter, Kreidler notes that while his office has exercised “unprecedented flexibility and responsiveness” during the COVID crisis to help employers keep their employees covered, many are unable to maintain coverage.

“The reality for too many employers who have had to temporarily scale down or close their businesses is that maintaining health insurance coverage for their current and former employees is just too great a financial burden. Thankfully, for these employers and their employees there is a safety net – the individual health insurance market. Now more than ever, it’s important to maintain the stability of the individual market,” Kreidler writes.

Kreidler says that affordability remains a key challenge in the individual market, especially since nearly 50% of individuals who purchase coverage on Washington’s individual market do so without premium subsidies. In recent years, market uncertainty has resulted in increased premiums and lower enrollment in the individual market.


Image: Insurance Commissioner Mike Kreidler

“Because so many of the people in our market are not receiving a premium subsidy, increased premiums may have an even greater impact in Washington than other states,” writes Kreidler. “I continue to believe that reviving the federal reinsurance program is the most important step that Congress could take to maintain and increase the stability of our individual market…In addition, at a time when insurers are facing uncertainty regarding the financial impacts of COVID-19 treatment, it would provide certainty for them that the costs to care for their highest cost enrollees would be limited.”

In a separate letter, Health Care Committee Chairs Rep. Eileen Cody and Sen. Annette Cleveland, joined Kreidler’s call to revive the program.

“Now more than ever, we as elected leaders have a responsibility to our constituents to make sure they have access to affordable health care – this starts with affordable health insurance. While we see Medicaid enrollments in our state soar up to over 1,600 per day and we see, since reopening on March 10th, approximately 10,000 new qualifying individuals on the Washington Health Benefit Exchange during this crisis, its is clear that our markets are experiencing unprecedented shifts and pressures during the COVID-19 crisis. As the state health care legislative leaders, we urgently request that you take steps to help stabilize the markets and increase affordability as we look ahead to the 2021 plan year,” they write.