Small group market: single risk pool: index rate.
The repeal of the federal transitional reinsurance program references in AB 157 could potentially lead to changes in how insurers calculate premiums for small employer health plans. By establishing a uniform risk pool based solely on state law rather than federal guidelines, there is a possibility of stabilizing the premium rates for small group health insurance plans. This could encourage more small employers to participate in the market, thus increasing access to affordable health care for small business employees.
Assembly Bill No. 157, introduced by Assembly Member Wood, amends Section 10753.05 of the California Insurance Code concerning health care coverage for small employers. Its primary focus is on the rating structure of health benefit plans within the small group market. The bill proposes to delete references to the federal transitional reinsurance program, which is designed to stabilize premiums in conjunction with the Affordable Care Act. This amendment signifies a shift towards a simpler regulatory framework that aligns California’s insurance laws more closely with existing state policies, which enhances the market's adaptability to regulatory changes at the federal level.
While supporters of AB 157 argue that the changes will bolster the small group insurance market by streamlining regulations, opponents may raise concerns about the implications of removing federal protections. There are fears that without the transitional reinsurance program, premiums could become more volatile, which may negatively affect small employers and their employees looking for affordable health insurance options. Additionally, some industry stakeholders might argue that the bill alters the balance of regulatory protections that were designed to ensure fair access to health care coverage across diverse market segments.