The federal government approved a waiver from Alaska to create a reinsurance program intended to reduce premiums for Obamacare customers.
The Trump administration approved a waiver for the state to set up a reinsurance program that would help cover large medical claims. It is the first waiver approved under a new federal program intended to provide flexibility for states' individual markets, which are used by people who don't have insurance through work and include Obamacare's exchanges.
The federal government will provide $50 million, and the state will kick in $11 million for the reinsurance program for 2018. The money would not be new funding but instead would come from savings from lower premiums on Obamacare's exchanges.
The Department of Health and Human Services estimates the waiver could help reduce premiums in Alaska next year by 20 percent and help an additional 1,460 Alaskans get coverage. The savings from that 20 percent would go toward the reinsurance program, so the funding would not add to the federal deficit.
Centers for Medicare and Medicaid Services Administrator Seema Verma said that the waiver isn't a long-term solution, "but it does stabilize Alaska's insurance market."
Alaska is the first state to receive approval for the waiver, which lets states skip requirements from Obamacare.
One other state has a waiver pending: Minnesota, for another reinsurance program. But several states, such as New Hampshire, Iowa, Oregon and Oklahoma, are interested in it, said Randy Pate, CMS deputy administrator.
Alaska's waiver approval comes a day after CMS reported that 144 insurers submitted applications to offer Obamacare plans in 2018, down nearly 40 percent from the number of insurers that signed up a year ago.
Some insurers have blamed mounting financial losses in Obamacare for exits, while others have defected because of market instability they say has been caused by the Trump administration and Congress.