It’s called an “invisible reinsurance program.”
And a bill to create it in North Dakota was in a joint hearing of the House and Senate Industry, Business and Labor Committees Tuesday.
It was proposed by North Dakota Insurance Commissioner Jon Godfread. He said this bill deals with people who buy insurance in the marketplace.
"That's where we've seen a lot of the turmoil," Godfread said. "We've seen a lot of folks who make too much for a subsidy (under the Affordable Care Act), and have faced year after year of double-digit premium increases."
Godfread said his office was tasked with finding a way to provide some relief.
"This reinsurance program is one of those options," Godfread said.
Here’s how it would work: Your insurance carrier would pay claims up to $100,000. From $100,000 to $1 million, this “invisible reinsurance” would kick in, and it would pay 75 percent of the claims, with 25 percent from the carrier. Above $1 million, it would be a 60-40 split with the federal government.
Godfread said it’s “invisible” because you, as an individual policy holder, won’t notice it.
"Hopefully, your rates would be lower," Godfread said. "That's what you should notice. Outside of that, there should be nothing different."
Godfread said if the bill passed as is, it would be about a 20 percent reduction in premiums.
"That's a big deal," Godfread said.
Godfread said if the individual market is lost, and people don't have a place to go to buy health insurance, that would be a quick road to a single-payer system.
"We're doing the best we can to make the best out of a bad situation," Godfread said. "Absent some reform from Congress, this is our best option."
