The Commonwealth Health Reinsurance Program (CHRP) is designed to make individual health insurance coverage more affordable, particularly for unsubsidized individuals. It encourages a more stable membership base and increased competition among issuers in future years and, as a result, heightened consumer choice. The program lowers the cost of health insurance for consumers in the individual market by reimbursing carriers for a portion of their high-cost claims.

As directed by the General Assembly in 2021, the Virginia Bureau of Insurance (Bureau) applied for and received federal approval to establish a reinsurance program in the individual health insurance market for five years, beginning in benefit year (BY) 2023.(*1) The approved CHRP for BYs 2023 – 2027(*2) targets a 15-percent reduction in average member premium and is funded in part by substantial federal pass-through funding. For BY 2026, the CHRP reduced individual marketplace premiums by an average of 16.5 percent and received federal pass-through funding in excess of $346 million.

Besides lower premiums, Virginia’s individual market has seen increased carrier coverage and competition, with all counties having at least two carrier choices since CHRP inception. While other major policy changes, such as enhanced federal premium tax credits, Virginia’s transition to a state-based exchange, and Medicaid unwinding also occurred during this period, the CHRP has nonetheless contributed to carrier cost stability and plan affordability by reimbursing carriers for part of their high-cost claims.
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(*1) This report uses the terms “benefit year" (BY) and “plan year" (PY). Benefit year refers specifically to activities directly related to administration of the CHRP benefit. Plan year refers more broadly to the Bureau’s regulation of health insurance plans, such as the approval of premium rates. For example, benefit year 2023 for the CHRP applies to individual health insurance claims during plan year 2023 (January 1 – December 31, 2023). Benefit year and plan year cover the same time period.
(*2) Activities related to a given CHRP benefit year occur over a three-year period. Preparation such as initial cost estimation, program parameter selection, and rate setting occurs in the year prior to the benefit year. Claims are incurred and pass-through funding is awarded during the benefit year, while calculation and payment of reinsurance claims occur in the year following the benefit year. This report addresses activities during 2026, which includes activities related to BY 2025, 2026, and 2027.