Stop Health Premium Spikes Act of 2020

To direct the Secretary of Health and Human Services to establish a program of risk corridors for health insurance issuers offering health insurance coverage in the individual or small group market for certain plan years. 1. Short title This Act may be cited as the Stop Health Premium Spikes Act of 2020 2. Establishing a program of risk corridors for health insurance issuers offering health insurance coverage in the individual or small group market for certain plan years (a) In general The Secretary of Health and Human Services (in this section referred to as the Secretary (b) Payment methodology The Secretary shall provide under the program established under subsection (a) that if the allowable costs for a health insurance issuer offering health insurance coverage in the individual or small group market for any plan year are more than 105 percent of the target amount, the Secretary shall pay to the issuer an amount equal to 75 percent of the allowable costs in excess of 105 percent of the target amount. (c) Information collection The Secretary shall establish a process under which information is collected from health insurance issuers offering health insurance coverage in the individual or small group market for purposes of carrying out this section. (d) Definitions (1) Allowable costs (A) In general The amount of allowable costs of a health insurance issuer offering health insurance coverage in the individual or small group market for any year is an amount equal to the total costs (other than administrative costs) of such issuer in providing benefits covered by such coverage. (B) Certain reductions Allowable costs shall be reduced by any— (i) risk adjustment payments received under section 1341 of the Patient Protection and Affordable Care Act ( 42 U.S.C. 18061 (ii) reinsurance payments received pursuant to a waiver approved under section 1332 of such Act ( 42 U.S.C. 18052 (2) Additional terms For purposes of this section, the terms health insurance issuer health insurance coverage individual market small group market 42 U.S.C. 300gg–91 (3) Target amount The target amount of health insurance coverage offered in the individual or small group market for any year is an amount equal to the total premiums (including any premium subsidies under any governmental program), reduced by the administrative costs of the coverage. (e) Implementation The Secretary of Health and Human Services may implement the provisions of this section by subregulatory guidance, program instruction, or otherwise. (f) Appropriation There are appropriated, out of any monies in the Treasury not otherwise obligated, such sums as may be necessary to carry out this section.

Summary: Stop Health Premium Spikes Act of 2020 This bill establishes a temporary risk corridor program to reimburse health insurers for medical costs that are greater than expected. Specifically, the program requires the Department of Health and Human Services to pay insurers 75% of the cost of providing benefits under a plan that exceeds 105% of the total annual premiums for the plan, reduced by administrative expenses. The program applies to plan years 2020 and 2021.