Update on canceled plans: Will changes to 2014 reinsurance and risk corridor programs provide financial relief?

On November 14, 2013, the president announced changes to healthcare reform, including the potential reinstatement of certain canceled health policies, as well as suggesting that changes might be made to the federal risk corridor program. Since then, the administration has provided more specifics on the proposed changes to the risk corridor calculations. In addition, they also proposed significant changes to the federal reinsurance program and extended deadlines for the filing of 2015 premium rates.

All of these changes are clearly designed to stabilize the fledgling reformed markets on and off the exchanges—and in particular to reduce the chances that insurers might exit the exchange markets or increase premium rates dramatically in 2015.

Will these changes to 2014 reinsurance and risk corridor programs provide financial relief for insurers? This paper by Doug Norris and Hans Leida offers some perspective.