The funds, known as “pass-through funding,” are determined by HHS and the Treasury Department on an annual basis, and go to states that have implemented their reinsurance programs to lower premiums through a section 1332 waiver. The waivers allow states to revamp their insurance regulations in novel ways with the goal of improving coverage access and affordability.
State-based reinsurance programs created through such waivers are designed to improve insurance affordability and market stability by reimbursing plans for a portion of pricey claims that would otherwise be paid by consumers and the government through higher premiums.
