The three types of reinsurance created by federal health reform

Abstract

The Patient Protection and Affordable Care Act contains three different forms of reinsurance, covering individual insurers, small-group insurers, and employers that insure early retirees. Each reinsurance program has a distinctive structure that serves a unique purpose. Each also has predecessors in various forms of public reinsurance implemented previously by state and federal governments. This article explains the structure of and purpose for each reinsurance provision and why it should no longer be needed once reinsurance helps launch health reform safely.