Health Plan Weekly

Reinsurance programs, which have largely faded into the background since the Affordable Care Act marketplace stabilized, are once again attracting attention.

First, a study published in March highlighted the unintended consequences of Georgia’s reinsurance program — and was soon followed by a piece from policy experts critiquing that study. And during the presidential campaign, Vice President-elect JD Vance brought up reinsurance as part of a pitch to revive high-risk pools in the individual insurance market.

With Donald Trump set to be the 47th president and Republicans in complete control of Congress, the fate of enhanced subsidies for Affordable Care Act exchange enrollees hangs in the balance. If these subsidies expire, there may be renewed talk of state-based reinsurance programs.

States can apply for and implement reinsurance programs via Section 1332 waivers of the ACA, which allow them to waive normal rating rules in order to pursue marketplace innovations. The programs work by subsidizing insurers’ highest-cost claims, allowing them to charge lower premiums overall. Between 2017 and 2024, 20 states have had Section 1332 waivers approved, according to CMS. Among them, 17 states operated state-based individual market reinsurance programs during the 2023 plan year.

Ending nearly a year of “will-they-or-won’t-they” speculation, The Cigna Group on Nov. 11 confirmed it is not pursuing an acquisition of Humana Inc., thus ending the possibility of a “Cigmana,” as some analysts called it.

In a press release outlining its capital priorities, the insurer emphasized its commitment to established merger and acquisition (M&A) criteria and said it “would only consider acquisitions that are strategically aligned, financially attractive, and have a high probability to close.” Cigna also affirmed its stock repurchase activity, noting it has bought back $6 billion worth of stock year to date and will continue into 2025, using proceeds from the pending sale of its Medicare Advantage (MA) business to Health Care Service Corp., which is expected to close in the first quarter of 2025.