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States Embrace Reinsurance to Help With Obamacare Costs

Feb. 11, 2020, 10:46 AM

A jump in the number of states setting up reinsurance programs puts a spotlight on an effective tool for combating stubbornly high premiums in the individual health insurance market.

States that have set up reinsurance programs, which help insurers cover the cost of the largest claims, have seen a 17% drop in premiums on average in the first year of operation. That track record will likely attract more states as policy makers struggle to make health insurance more affordable, researchers say.

Reinsurance programs typically are financed by fees on individual or employer health plans that are then pooled and used...

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