Dive Brief:
- A memo released Wednesday by CMS announces that reinsurance payments will increase for the 2014 benefit year for insurers providing ACA-compliant individual plans.
- CMS was originally planning to pay insurers 80% of enrollees' costs between $45,000 and $250,000 but it now plans to pay 100%.
- This fully covers insurers for any high-cost claims from 2014, when ACA plans first went into effect, assisting those that incurred high costs for sicker members.
Dive Insight:
CMS says it boosted rates because "for the 2014 benefit year, reinsurance contributions exceeded the requests for reinsurance payments." HHS has received approximately $8.7 billion in reinsurance contributions for 2014, the memo says and expects to collect $1 billion more by November 15, 2015.
As Modern Healthcare reports, several insurers have already calculated their expected payments from the program and assumed a 100% reinsurance rate in their accounting. They report that Anthem has projected a $753-million reinsurance payment for 2014; Humana a $586-million payment; and Aetna a $338-million payment.
HHS will send insurers reports detailing the total amount they will receive for the 2014 benefit year on June 30, 2015. Payments will be received beginning in August.