Stearns S, Slifkin R, Thorpe K.
AHSR FHSR Annu Meet Abstr Book. 1995; 12: 6.
University of North Carolina, Chapel Hill 27299-7400, USA.
PROBLEM AND OBJECTIVES. State risk pools are state-sponsored plans for persons who want to buy health insurance but are medically uninsurable or unable to find a policy at reasonable cost. This paper provides as assessment of the enrollment, expenditure and disenrollment experience to provide insights into the role of the risk pools in state health reform. DATA AND METHODS. The paper synthesizes results from analyses of enrollment and claims data from eight risk pools for the period 1988 through 1991. RESULTS AND CONCLUSIONS. The risk pools studied had high enrollee turnover. Disenrollment was significantly associated with premium increases and evidence of adverse selection was found. Despite their high risk status, many disenrollees appear not to be insured following disenrollment. Most expenditures in a year were attributable to a small proportion of enrollees, indicating that many high-risk individuals do not require high medical expenditures. Despite the fact that premiums are generally set at 150 percent of the standard risk, most pools have loss ratios of about 2. IMPLICATIONS FOR AUDIENCE. Although a continuous influx of new enrollees can help counter problems of adverse selection, the high disenrollment rates raise concerns about the long term viability of risk pools. Furthermore, the ways in which risk pools cover their losses may entail regressive tax burden or embody other undesirable incentives and any increases in subsidies could manify these problems. In order to stabilize these pools, states may need to consider innovations in setting premiums (e.g., greater use of risk rating or income-related premiums) or in assessments to cover losses.
Publication Types:
Keywords:
- Health Expenditures
- Insurance, Health
- Population
- economics
- hsrmtgs
Other ID:
UI: 102216007
From Meeting Abstracts