MIT Sloan Health Systems Initiative

Seven states where Obamacare is cheaper and works better

State reimbursement pools have significantly improved the effectiveness of Affordable Care Act ( ACA ). There were seven states that successfully experimented with these pools in 2019.

In the typical situation, a state reimburses ACA insurers for a specified portion of their high cost claims.In return, the insurers substantially reduce the premiums for all individual policy holders in the state --on average, by almost 20% in 2019. 

The pools are financed partly by a federal pass through payment to the states.  This represents the federal savings on ACA subsidies because of the lower premiums. The state appropriates the remaining monies needed to finance the reimbursement pools.

But the state costs for these pools are outweighed by the benefits of lower premiums to state residents.The benefits flow mainly to residents buying policies off the ACA exchanges and, to a less extent, subsidized buyers of healthcare policies on the state's ACA exchanges. 

Download a pdf of the Wall Street Journal article here.