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How States Can Use New Revenue to Lower Consumer Costs for Individual Health Insurance

By Stan Dorn,


On January 1, 2021, the federal government will abandon more than $15 billion in annual health insurance assessment (HIA) revenue. States that act promptly can capture the lion’s share of these dollars, using them to reduce their residents’ health care costs. By passing legislation in 2020, a state can do this without increasing the assessments that insurers pay. Such a state would take the money that its insurance companies now send to Washington, D.C., bring it back to the state, and use it to lower health insurance costs for residents. An accompanying issue brief, A Golden Opportunity for States to Make Health Insurance More Affordable: Rapid Action Required, explains what states can do to recapture this revenue rather than let it expire.

In this report, we show how states could use these dollars to lower residents’ health care costs in the individual market. We begin with a brief analysis of current affordability challenges facing people who use that market to buy insurance.