Maryland Passes Reinsurance Law to Stabilize Premiums

April 11, 2018

Larry Hogan, governor of Maryland, recently signed new health care legislation in the state that creates a reinsurance program for high-cost patients in order to stabilize premiums within the state.

“This problem should have been solved in Washington, but nothing has been done,” Gov Hogan said in a press release. “Our team has been working on potential solutions for more than a year, and I want to thank the Speaker, the Senate President, and legislators from both parties for working together with us in a common sense, bipartisan manner to address this crisis head-on and to prevent these massive rate increases.”

As health reform has stalled on the federal level, more states are taking steps to shore-up ACA marketplace premiums for 2019. As a result of inaction in Washington, 2019 premiums in Maryland—and in many states across the country—were projected to increase by more than 50%.

The new program creates a reinsurance fund that will be administered by the Maryland Health Benefit Exchange. State and federal funds will be used to pay for catastrophic claims for patients enrolled through the state’s ACA exchange. This funding will be pulled from federal funding using a CMS 1332 state innovation waiver, similar to a program in Alaska that has successfully stabilized premiums in that state.

Governor Hogan stressed that bipartisan solutions like this are needed to depoliticize the health care crisis and find meaningful solutions for high premiums throughout the country.

“This is an example of what can be accomplished when we work together, and I’m proud to be signing these protections into law,” he said.

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