Oregon Reinsurance Program

The Oregon Patient Protection and Affordable Care Act 1332 State Innovation Waiver – Oregon Reinsurance Program

The State of Oregon implemented a state-based reinsurance program using the federal Patient Protection and Affordable Care Act (ACA) 1332 Waiver, effective 2018. State Innovation Waivers (also referred to as section 1332 waivers) allow states to pursue innovative strategies for providing residents with access to high quality, affordable health insurance while retaining the basic protections of the ACA.

This program is similar to the federal transitional reinsurance program that existed in the early years of the ACA. The Oregon Reinsurance Program (ORP) partially reimburses health insurance companies on the individual insurance marketplace for enrollees' accumulated health care claims under eligible ACA individual plans from the Oregon Health Insurance Marketplace. The parameters are set annually to help lower premium rates, stabilize the individual health insurance market, and expand coverage throughout the state. The parameters consist of a total value of health care cost per claimant, measured against a starting attachment point claim amount, below a maximum claim amount, and coinsurance rate. The ORP shares the high-cost claims with the insurer, which lessens the burden of the claimant.

The ORP is funded by grants from the U.S. Department of Health and Human Services (HHS) and the U.S. Treasury, along with a 2 percent assessment imposed on commercial health premiums. Of the 2 percent assessment, 0.3 percent is retained by the ORP to reimburse eligible health insurers on the individual health insurance market. The remaining total assessment of about 1.7 percent is transferred to the Oregon Health Authority to fund Medicaid. As a result, Oregon's Patient Protection and Affordable Care Act 1332 State Innovation and Empowerment Waiver helps lower the cost of health insurance plans throughout the state's 36 counties, all of which have four to six options per county.

HHS and Treasury must determine that the waiver will provide coverage that is at least as comprehensive as the coverage provided without the waiver; provide coverage and cost-sharing protections against excessive out-of-pocket spending that are a least as affordable without the waiver; provide coverage to at least a comparable number of residents as without the waiver; and not increase the federal deficit. This is done by calculating advanced premium tax credits, member enrollment, federal poverty levels, and comprehensive health plans cost per member. Those departments then pass the net savings back to Oregon to help fund the ORP.