ACA Title 1, Sec. 1341. Transitional reinsurance program for individual and small group markets in each state: “Bad” – Should be emergency provision only. Looks good on the surface, but should be considered as a alternative of last resort, not first resort. Its very presence may encourage irresponsible underwriting in the transitional period. Its good that it is seen as only a three year program with the possibility of extension. Concentration of high risk individuals in any insurance pool is not a good general idea and has a tendency to work against the normalization of risk in insured pools. Also reduces private sector reinsurance solutions and the number of reinsurance providers that write business in employer markets. Should be solution of “last resort” and considered a back up if private reinsurers fail to underwrite needed business. Price tag goes from $10 billion to $4 billion over three years.

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