The Role of Reinsurance in State Efforts to Expand Coverage

Recently, some states have revisited the concept of reinsurance to spread risk in insurance markets, improve the predictability of claims, and reduce the markup of premiums that insurers charge as a buffer against unanticipated claims. This brief examines efforts in Arizona, Connecticut, Idaho, Massachusetts, New Mexico, and New York and proposes lessons for states considering reinsurance programs to expand small group or individual coverage. The author concludes that, while it is unlikely that a state-level reinsurance program will solve the complex problem of making coverage affordable and accessible to all, it can be an efficient strategy for stabilizing coverage and perhaps expanding it.