Health insurers in New Hampshire have requested rate hikes of, in some cases, more than 40 percent for 2018. In order to mitigate these anticipated increases, Insurance Commissioner Roger Sevigny has proposed what he calls a “reinsurance” program:
a pool of money that carriers in the individual market could dip into as needed. The program would have been primarily funded via a $32 million assessment on all of the insurers operating in New Hampshire, along with some federal money.
Sevigny’s proposal is not reinsurance as that term has been historically understood.
Reinsurance does not require government intervention. It is a voluntary transaction between private insurers. An insurance company insures part of the policies it has written with one or more other insurance companies. The insurance company that wrote the insurance is protecting itself against claims being higher than anticipated. The insurance companies reinsuring the policies are essentially betting that claims will not be higher than anticipated.
What Sevigny is talking about bears no resemblance to true reinsurance. He wants to force insurance companies to pay into a government “pool of money” from which he will make payments to Obamacare insurers to cover their losses from Obamacare.
Sevigny’s faux-reinsurance proposal is wildly popular among the Democrats because it moves us closer to their ultimate goal – European-style single-payer.
Sevigny’s faux-reinsurance socializes –that is, hides– the true cost of Obamacare. Insurance companies sell Obamacare insurance to certain demographics at a loss, then Sevigny covers these losses from the “pool of money.” Of course, the “assessments” to fill the “pool of money” are funded by charging other insureds higher-than-necessary premiums.
Sevigny’s faux-reinsurance moves us toward single-payer because [o]ver time, the tendency will be to socialize more and more of the cost of health insurance and claim that the cost of health insurance is being kept under control.