State Innovation Waiver Reinsurance Program

Reinsurance program - creation - payments for high-cost insurance claims - program contingent on federal waiver or funding approval - special fees - premium tax revenues - other funding sources - cash fund created - appropriation - repeal. The act authorizes the commissioner of insurance to apply to the secretary of the United States department of health and human services for a state innovation waiver, federal funding, or both, to allow the state to implement and operate a two-year reinsurance program to assist health insurers in paying high-cost insurance claims. The state cannot implement the program absent waiver or funding approval from the secretary. The program is established as an enterprise for purposes of section 20 of article X of the state constitution so long as the program satisfies enterprise status requirements.

The commissioner is to establish payment parameters at levels to effectuate targeted insurance premium reductions. The payment parameters include:

• The attachment point, above which claims costs are eligible for reinsurance payments;
• The coinsurance rate at which the program will reimburse carriers for claims above the attachment point; and
• The reinsurance cap, above which claims costs are no longer eligible for reinsurance payments from the program.

The commissioner is authorized to assess special fees against hospitals and, under specified circumstances, against health insurers to provide funding for the program. Additionally, the program is to receive money from the following sources to operate the program:

• Federal pass-through funding or other federal funds made available for the program;
• For the 2020-21 and 2021-22 fiscal years, an amount of premium tax revenues collected under current law that exceeds the amount collected in calendar year 2019;
• $15 million in 2020 and $40 million in 2021 from the general fund, contingent on the passage of House Bill 19-1245; and
• Any money the general assembly appropriates to the program fund.

The act creates the reinsurance program cash fund and continuously appropriates the money in the fund to the division of insurance to operate the program. The commissioner is also authorized to seek, accept, and expend gifts, grants, or donations from private or public sources.

The program repeals on September 1, 2023, unless the federal government denies the waiver or funding request, in which case the program repeals upon that denial.

$785,904 is appropriated to the department of regulatory agencies for use by the division of insurance to implement the act.

(Note: This summary applies to this bill as enacted.)