A majority of insurance regulators at a Senate hearing wanted Congress to prop up Obamacare insurers with more funding to cover their sickest claims.
The regulators testified at a hearing of the Senate Health, Education, Labor, and Pensions Committee on Wednesday on how to stabilize the individual market. A majority of the five state insurance commissioners at the hearing wanted Congress to provide a reinsurance fund for Obamacare insurers.
Reinsurance pays Obamacare insurers with the sickest claims. Democrats have called for adding such funding to a bipartisan deal, but Republicans have so far not embraced the idea.
"A $15 billion reinsurance program in the context of a careful, bipartisan approach to improving our healthcare system would be something I would view favorably," said Pennsylvania Insurance Commissioner Teresa Miller at the hearing on Wednesday.
At the hearing, four out of the five insurance commissioners openly called for reinsurance funds, which help pay insurers with the sickest claims.
Insurance commissioners said a federal reinsurance program is needed to help with upfront costs.
"The federal reinsurance program has a benefit for states like mine that may not have an ability to up front receive money to get our programs started," said Julie Mix McPeak, Tennessee's insurance commissioner.
She added a reinsurance program could help bring in more Obamacare insurers since they would have a better idea of how to manage the risk of the enrollee population.
Obamacare had a reinsurance program for the first three years of the exchanges but it expired this year.
Oklahoma's insurance commissioner John Doak did not specifically call for a reinsurance program. He instead pushed for greater flexibility and advocated a proposal from Sens. Bill Cassidy, R-La., and Lindsey Graham, R-S.C., to block grant Medicaid and Obamacare tax credit funding to states.
Reinsurance funding is quickly emerging as a sticking point in the committee's effort to create a bipartisan stabilization package. Democrats have called for the funding, but HELP Chairman Sen. Lamar Alexander, R-Tenn., is only open to giving states more flexibility to avoid Obamacare regulations and to guarantee funding for insurer subsidies for 2018.
Alexander was skeptical about why new funding would be needed for reinsurance. He pointed to Alaska, which used some state funds to start its reinsurance program that was recently approved by the federal government.
"If we need reinsurance, then why can't states do it?" he asked.
Alaska's insurance commissioner Lori Wing-Heier said states may have a hard time getting funding from their legislature for the first year to show the impact on the rates.
"It is a chicken and an egg," she said.
"They want to see the results of the premiums coming down," but the funding is needed to start that program to get those results, Wing-Heier added.
She also shot down a question from Alexander on whether a state could just charge $4 for every plan to fund a reinsurance plan. Wing-Heier said taxing the insurers would be hard for a state like Alaska that is trying to hold on to a market with a low enrollee population and in rural areas.