WSHIPWashington State Health Insurance Pool
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The OIC did not confine its exploration of methods to make health insurance coverage more affordable to the existing WSHIP. The OIC commissioned a report ("Chollet Report") exploring alternative options for making coverage for high-cost individuals more affordable.
The Chollet Report compares the advantages and disadvantages of reinsurance, risk adjustment, and high-risk pools such as WSHIP on making small group and individual insurance more affordable, accessible, and effective.
Although the legislation contemplates transitioning from the WSHIP to a new subsidized reinsurance plan, it also implements the Insurance Commissioner's major recommendations to reform the WSHIP in the near-term.
(133) The new legislation replaces WSHIP's "guaranteed renewability" language with a more flexible "continued coverage" guarantee.
Any individual who scores over a prespecified amount is automatically denied coverage and referred to WSHIP.
(72.) The average annual cost per enrollee in WSHIP is $1418 per month.
(81.) The cost of the premiums is cited by two-thirds of high-risk citizens referred to WSHIP as a barrier to enrollment.
The OIC stated that it could not adopt this proposal because it believed that the Washington State Constitution's prohibition against impairment of the obligations of the contract prohibits eliminating the guaranteed renewability of WSHIP policies for current enrollees.
When an applicant scores over 324 points on the questionnaire, the applicant is referred to WSHIP. Id.
Under Washington law, there is little incentive for a health insurance carrier to pay out insufficient amounts in claims payments, and/or maintain extremely high premiums, because either or both of these circumstances will result in a loss ratio higher than seventy-two percent, which will trigger the payment of the excess to WSHIP. A reasonable insurer would spend those funds to lower premiums and/or pay additional claims to engender customer goodwill, rather than pay it to the state with no reciprocal benefit.