Commonwealth Health Reinsurance Program (CHRP)
The State Corporation Commission established the Commonwealth Health Reinsurance Program (CHRP) to increase affordability in the individual health insurance market. The goal is to lower premiums by up to 20 percent, depending on available revenue. Virginia received federal approval to establish the CHRP (under a Section 1332 waiver) for an initial period of up to five years, beginning with benefit year 2023. For information on the process for obtaining the required waiver for the CHRP, please visit the Reinsurance Waiver Page
The CHRP is designed to operate as a traditional reinsurance program by reimbursing ACA individual market health insurers for a percentage (or “coinsurance rate”) of an enrollee’s claims costs that exceed a specified threshold (or “attachment point”) and up to a specified ceiling (or “reinsurance cap”). These elements are referred to as the “program parameters,” and additional information on those elements is available in the Program Parameters section below.
By reducing some of the risk that carriers typically factor into their premium rates, the CHRP achieves lower premium costs for consumers. The CHRP is supported mainly through federal “pass-through” funding. These "pass through" funds are based on federal savings from reduced premium tax credits (PTCs) resulting from lower health insurance premiums.
The SCC held a public forum on the potential suspension of the CHRP for 2024 on June 20, 2023, and provided for a 30-day written comment period that ended July 9, 2023. Public comments are available below.
Section 38.2-6602 B 2 of the Code of Virginia requires the SCC to establish and publish the payment parameters for the CHRP by May 1 of the year prior to the CHRP benefit year. The Bureau of Insurance provides to the General Assembly money committees the costs for various actuarial scenarios of premium reduction in order to obtain clear direction on the extent of funding for a reinsurance program each benefit year.
| CHRP Payment Parameters (by Benefit Year) | Year | ||||
|---|---|---|---|---|---|
| 2023 | 2024 | 2025 | 2026 | 2027 | |
| Attachment Point | $40,000 | $45,000 | $45,000 | ||
| Cap | $155,000 | $175,000 | $175,000 | ||
| Coinsurance | 70% | 70% | 70% | ||
| Targeted Premium Reduction (before morbidity impact) |
15% | 15% | 15% | ||
| Actual Average Premium Reduction from Reinsurance | 17.30% | 16.40% | |||
The SCC held a public forum on the potential suspension of the CHRP for 2024 on June 20, 2023, and provided for a 30-day written comment period that ended July 9, 2023. No comments were made at the meeting, but two organizations provided written comments: