“Reinsurance” to lower premiums?

The New Hampshire Insurance Department is seeking permission from the federal government to establish a reinsurance program to lower individual health insurance rates.

Reinsurance helps insurance companies share risk

A reinsurance program creates a pool of money that insurance companies could draw from when an individual files a very high claim for health care.  Theoretically this would allow insurance companies to charge consumers less for health insurance.

The Insurance Department proposes funding the program with $8.2 million from the federal government and a fee for all insurance companies.

“Right now the individual market is in peril. Companies could decide they don't want to do business in New Hampshire, and if nothing is done to help stabilize the market, we've seen what happens in other states. The carriers just leave.”

- Insurance Commissioner Roger Sevigny 

No guarantees of lower costs

Gov. Chris Sununu supports the idea but does not support a fee for insurance companies.  He believes that fee will be passed on to consumers, undermining efforts to lower health insurance rates.

There is also no guarantee that reinsurance will be enough for insurance companies to significantly lower their rates.  Insurance companies would not be required to lower their rates.

What’s your opinion?

The Insurance Department is accepting public comments on the proposal until August 17.  A press release from the Insurance Department has more details on public hearings and how to comment. 

Do you support reinsurance for New Hampshire’s health insurance market?  Share your opinion in the comments below.