Washington state could make health coverage more affordable by creating a reinsurance program for individual and small group plans, increasing the minimum medical loss ratio standard, and using reference pricing, according to a report from the state’s Office of the Insurance Commissioner.

The report used claims and spending data for each state to assess how each policy was implemented and the estimated impact on costs. Insurance Commissioner Mike Kreidler noted that while the state has improved access to health care, affordability remains an issue.

“It is clear from this report that we can make a difference and begin to address the underlying health care costs that we have long struggled with,” Kreidler said in a report from AM Best.

Get the latest reinsurance news straight to your inbox twice a week. Sign up here

The reinsurance program for individual and small group plans would cover “some or all” of the high-cost claims based on specific circumstances, individuals, or total claims costs. The program could reduce premiums by 10% but would require significant government funding. The program is expected to affect between 292,000 and 344,700 people.

The report also proposed raising the minimum medical loss ratio standard to 88% for all commercial health plans, which could reduce premiums by 0.9% to 2.5% for up to 1.6 million people.

MLR standards require health insurers to spend a minimum portion of their premiums on medical care or quality improvement. The current standard is 80% for individual and small group plans and 85% for large group markets.

Read more: Property and Casualty Reinsurance Broker in Florida Today

In addition, the report recommended benchmarking prices, which tie care prices to specific levels, such as a percentage of Medicare reimbursement rates. Capping them at 160% of Medicare reimbursement rates would reduce health care spending by 3% to 19% annually, though implementation would be complex.

The report also looked at the global hospital budget, where hospitals receive a fixed amount for all services provided annually. This system aims to shift away from practices encouraged by fee-for-service fees, such as increasing the volume and intensity of services. The global budget could reduce hospital costs by up to 7.1%, but it would entail significant implementation costs.

Finally, the report addresses the need for health care costs to meet standards set by the state’s Health Care Cost Transparency Board. Currently, meeting these standards is voluntary.

Establishing mandatory benchmarks would save between $1.4 billion and $1.9 billion annually, but enforcement mechanisms will be essential to success.

A spokesman for the Washington-based Association of Health Plans said the organization is reviewing the report but appreciates the regulator’s efforts to provide objective data to policymakers on these complex issues.

What do you think of this story? Feel free to share your comments below.

Get the latest reinsurance news straight to your inbox twice a week. Sign up here