SB 770

This bill creates the Wisconsin Healthcare Stability Plan (WIHSP), which is a

state-based reinsurance program for health carriers, subject to the approval of a

waiver of the federal Patient Protection and Affordable Care Act. WIHSP makes a

reinsurance payment to a health carrier if the claims for an individual who is

enrolled in a health benefit plan of the carrier exceed a threshold amount, known as

the attachment point, in a benefit year. The commissioner of the Office of the

Commissioner of Insurance in this state administers WIHSP. After consulting with

an actuarial firm, the commissioner sets the payment parameters for the

reinsurance payment as specified under the bill. In addition to the attachment point,

the other payment parameters are the reinsurance cap, which is the maximum

amount of claims eligible for a reinsurance payment, and the coinsurance rate, which

is the percent of the claim amount eligible for a reinsurance payment. The

commissioner must design and adjust the payment parameters with the goal to

stabilize or reduce premium rates in the individual health insurance market,

increase participation by health carriers in the individual market, improve access to

health care providers and services for individuals purchasing individual health

insurance coverage, mitigate the impact high-risk individuals have on premium

rates in the individual market, and take into account any federal funding and the

total amount of funding available for the plan. If the funding amounts available for

expenditure are not anticipated to fully fund the reinsurance payments as of July 1

of the year before the applicable benefit year, the commissioner must adjust the

payment parameters and then allow the health carrier to adjust its filing of

insurance premium rates. If funding is not available to make all reinsurance

payments in a benefit year, reinsurance payments will be made proportional to the

health carrier's share of aggregate state resident premiums, as determined by the

commissioner. Under the bill, health carriers are required to calculate the rates the

carrier would have charged for a benefit year if WIHSP was not established and

submit those rates as part of its rate filing.

The commissioner must calculate a reinsurance payment to be made to a health

carrier as specified in the bill. If the claims cost amounts for an individual enrollee

of the health benefit plan do not exceed the attachment point threshold, the

commissioner may not make a reinsurance payment. If the costs exceed the

attachment point, then the commissioner makes a reinsurance payment that is the

coinsurance rate multiplied by whichever of the following is less 1) the claims cost

minus the attachment point or 2) the reinsurance cap minus the attachment point.

When a health carrier meets criteria set in the bill and any requirements set by the

commissioner, the carrier may request a reinsurance payment. A health carrier,

however, is not eligible to receive a reinsurance payment unless the carrier agrees

not to bring a lawsuit over any delay in reinsurance payments or reduction in the

payments for insufficient funding. The commissioner must notify the carrier of any