Document: Missouri Health Insurance Innovation Task Force ReportView
A task force Missouri Gov. Mike Parson created to find innovations in the state's health insurance market came up with two recommendations — expand availability of "catastrophic plans" and create a reinsurance program.
The Missouri Health Insurance Innovation Task Force first convened in August, with the hope to identify well deserved options for the state's residents, said Chlora Lindley-Myers, chairwoman of the group. It was charged with identifying innovative concepts to improve access to affordable insurance options and access to health care services. It was also tasked with reducing the number of uninsured residents of Missouri.
The concepts the task for came up with were to be used to apply for a (Section 1332) waiver application for the Affordable Care Act.
The waivers allow states to implement innovations, provided they are at least as comprehensive and affordable as coverage provided absent the waiver, according to the Centers for Medicare and Medicaid Services.
"The task force has completed its work and offers for your consideration its recommendation, which proposes two concepts to pursue through a Section 1332 Waiver," Lindley-Myers, director of the state Department of Insurance, told the governor in the task force report's cover letter. "The task force believes these two concepts meet the objectives you set forth in Executive Order 19-13."
Catastrophic health insurance is a very high-deductible health plan designed for people younger than 30 — or others who meet financial requirements or qualify for hardship exemptions. The plans are intended for people who don't use the health care system often because of good health.
Holders of the plans generally pay for most or all of their medical costs until they reach the deductible threshold, which is typically several thousand dollars. Once the threshold is met, the plan kicks in.
Expanded availability of catastrophic plans would "minimize disruption to existing catastrophic policyholders; in other words, avoid increasing rates or reducing benefits for those currently enrolled in a catastrophic plan; and provide an additional lower-cost option for older individuals who would otherwise go uninsured or rely on short-term coverage," the report states.
An expanded catastrophic plan could save people hundreds of dollars on health care coverage. For a 27-year-old, the annual savings may be $340-$1,200, depending on the area. A 55-year-old could save $730-$2,600 annually.
A reinsurance program spreads higher-cost claims across a larger insurance pool, which lowers overall premiums for individuals. Reinsurance programs also reduce the volatility of claims, according to the report.
They "encourage new insurers to enter the Missouri insurance market and existing insurers to expand their service areas into rural Missouri," according to the report. They "lower premiums for all Missourians who get their health coverage through the individual market. This includes those who don't have health coverage through their work and for those starting a business."
A reinsurance program could reduce premiums between 10-29 percent, the report estimates.
Through the federal waiver process, states may recapture federal dollars that would otherwise be spent on premium tax credits.
Reinsurance programs are proven private-sector tools in managing difficult insurance markets, the report states. Twelve states have implemented a reinsurance program.