Sending Office: Honorable Scott H. Peters
Please join our bosses in supporting legislation that will help relieve the upward pressure on health premiums due to COVID-19. The projected health care costs associated with providing medical care for patients with COVID-19 will be enormous. However, COVID-19
will have an unpredictable effect on the national health insurance market. That is because insurers base premiums each year on estimated average health care costs of enrollees. Due to COVID-19, it is exceedingly difficult to accurately gauge how much medical
care Americans will consume this year and the next. This uncertainty is borne out in projections that health insurance premium prices for next year could increase anywhere between 4 to 40 percent.
The Stop Health Premium Spikes Act would mitigate these unpredictable premium hikes for consumers by establishing a risk corridor program through Health and Human Services (HHS) that would ensure insurance companies selling health care plans to
the individual and small group markets for 2020 and 2021 keep their rates stable during this time of immense uncertainty. The two-year program would provide assistance to insurers facing extreme loss in order to minimize spikes in premium pricing and maintain
a competitive, stable insurance marketplace.
Specifically, The Stop Health Premium Spikes Act of 2020:
- Establishes a risk-sharing funding arrangement for plan years 2020 and 2021 to ensure that insurers selling plans in the individual and small group market keep premiums stable.
- Calculates payments as a ratio of total costs incurred by a plan in claims (allowable costs) and the aggregate premiums earned minus administrative costs (target amount). Specifically, it requires HHS to pay 75 percent of a plan’s allowable
costs if allowable costs exceed 105 percent of the target amount. This gives health insurance issuers that disproportionately attract higher-risk populations (such as individuals with chronic conditions) protection against extreme losses.
- Authorizes appropriations to establish and administer the program.
To become a cosponsor or for more information, please contact Anais Borja with Rep. Peters,
firstname.lastname@example.org or Meryl Harold with Rep. Angie Craig,
SCOTT PETERS ANGIE CRAIG
Member of Congress Member of Congress
e-Dear Colleague version 2.0