Tim Kaine's Health Care Plan: Reinsurance

Jul 24, 2017

Sen. Tim Kaine, D-Va. arrives on Capitol Hill in Washington, Tuesday, July 18, 2017.
Credit AP Photo / Andrew Harnik

In Washington, leaders in both parties are at odds over how to move forward on health care. One senator who is trying to seize the moment is Democrat Tim Kaine, who says he has a plan to move forward.

It’s called reinsurance. The idea is that health insurance companies need insurance too, especially to handle claims that are higher than expected. It’s an idea that’s already common for flood insurance and crop insurance. Now Virginia Senator Tim Kaine wants to create an Individual Market Reinsurance Fund.

“That will stabilize premiums that will give insurance companies some stability so that they can stay in markets but will also enable those companies to write premiums at an average level not having to take into account the high-cost claims.”

When it was originally passed into law back in 2010, the Affordable Care Act included a reinsurance fund. But it was only temporary. Sabrina Corlette at Georgetown University says the idea back then was that it would not be needed long term.

“The drafters of the Affordable Care Act thought that the marketplaces would only need about three years to stabilize and that a lot more healthy people would enroll in the coverage than actually have.”

That didn’t happen though, and enrollment in ACA plans has been lower than anticipated. And those plans could end up costing about 20 percent more unless something happens to stabilize the marketplace. That’s why Kaine says now is the time to take action and create a permanent reinsurance fund. Republicans are criticizing the idea as a bailout for insurance companies.

This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association