Open enrollment is now underway, and premiums for health insurance offered through the Maryland Health Connection, Maryland’s Affordable Care Act (ACA) marketplace, will be lower in 2020 because of the state’s reinsurance program.

The Hilltop Institute at UMBC was an important behind-the-scenes player in developing the reinsurance program. Working with the Maryland Health Benefit Exchange (MHBE) in early 2018, Hilltop estimated the cost of a state reinsurance program using the state’s all-payer claims database. Governor Larry Hogan signed into law House Bill (HB) 1795 on April 5, 2018, authorizing the reinsurance program and directing the MHBE to apply for a §1332 waiver from the federal government. This waiver was required to implement Maryland’s program. To fund the reinsurance program, the Governor signed HB 1782 on April 10, 2018, which authorized the state to collect the 2019 health insurance provider tax that the federal government had suspended that year.

Hilltop assisted with the §1332 waiver application submitted to the Centers for Medicare & Medicaid Services (CMS) on May 31, 2018. CMS approved the waiver on August 22, and insurers immediately re-filed 2019 rates with the Maryland Insurance Administration (MIA). Prior to approval of the reinsurance program, insurers requested an average rate increase of 30 percent; with reinsurance, the MIA approved 2020 rates with a decrease of 10.3 percent. Coupled with last year’s decrease of 13.2 percent, the two-year cumulative impact is a rate decrease of more than 22 percent versus 2018 premiums.

To learn more, contact Laura Spicer, Director of Health Reform Studies.

To learn more about Hilltop’s work supporting health care access and affordability, go here.