The Affordable Care Act’s requirement that insurers offer coverage to everyone, including those with serious pre-existing medical expenses, has not resulted in a surge of hight-cost claims.

The federal agency that reinsurers commercial insurers against claims between $45,000 and $250,000 said that the number of such claims was lower than expected. As a result, it will cover 100% of the claims, rather than the 80% it could have paid if expenses had exceeded projections.

The Centers for Medicare & Medicaid Services (CMS) said its reinsurance program and a companion risk adjustment program, aimed at keeping premium stable and affordable, are working well.

“While they sound highly technical, reinsurance and risk adjustments are important milestones in a well-functioning and affordable marketplace that is able to cover all Americans without regard to their health status,” said Acting CMS Administrator Andy Slavitt.

Prior to the passage of the ACA, most states allowed insurance companies to deny coverage to people with pre-existing medical conditions. The ACA guaranteed coverage to these people and included premium stabilization programs to protect insurers against the unknown costs of covering high-risk individuals along with healthy, low-risk customers.

The reinsurance program protects against high-cost claims from consumers in the individual market (that is, not insured through their employer.) The risk adjustment program reduces the incentive for insurance companies to seek to ensure only healthy individuals.

“The early results for the risk adjustment and reinsurance premium stabilization programs demonstrate that these programs are working as intended,” said Kevin Counihan, CEO of the Health Insurance Marketplaces. This will “help keep premiums stable and encourage insurance companies to compete on quality and price, not who can attract the healthiest enrollees,” he added.

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