30 Second Introduction to State Risk Pool Funding

34 States maintain a State Health Insurance Risk Pool to provide their medically uninsurable citizens guaranteed issue individual health insurance. Agents and employers always ask me how a state funds their risk pool, so here is a brief description for those who are interested.

While different for each state, a state's risk pool funding is typically made up of the following components: 

1. Federal funding ($75 Million rationed to states for each fiscal years 2006 through 2010 by the State High-Risk Pool Funding Extension Act of 2006)
2. Premium payments
3. Assessments on insurance companies
4. State taxes

Premium costs range from 100% to 250% of standard medically underwritten rates. Even with higher premiums, most states require additional funds to cover high risk individuals. The total cost of risk pools paid by premiums ranges from 24% in New Mexico to 106% in West Virginia. The wide variation is due to each states insurance law, subsidy programs offered, and the normal cost of medically underwritten insurance. 

	Enrollment  (As of 12/31/08	Pre-Existing Condition Exclusion Period	Statutory Premium Cap as % of Standard Rates	Pool Offers Premium Subsidies	Percent of Total Cost Paid by Premiums
United States	199,020	n/a	n/a	15	n/a
Alabama	2,653	0 months	200%		76%
Alaska	469	6 months	150%		57%
Arkansas	3,061	6 months	150%		70%
California	7,036	3 months	125%		96%
Colorado	8,543	6 months	150%	x	50%
Connecticut	2,336	12 months	150%	x	62%
Florida	300	n/a	250%		57%
Illinois	15,682	6 months	150%		67%
Indiana	6,561	3 months	200%/150%	x	50%
Iowa	2,732	6 months	150%		47%
Kansas	1,830	3 months	150%		51%
Kentucky	4,458	12 months	175%		45%
Louisiana	1,110	6 months	200%		71%
Maryland	15,180	2 months	200%	x	37%
Minnesota	27,386	6 months	125%	x	45%
Mississippi	3,464	12 months	175%		76%
Missouri	2,999	12 months	150%	x	77%
Montana	2,995	12 months	200%/150	x	67%
Nebraska	5,089	6 months	140%		53%
New Hampshire	1,094	9 months	150%	x	47%
New Mexico	6,020	6 months	150%	x	24%
North Carolina	n/a	12 months	200%		n/a
North Dakota	1,463	6 months	135%		69%
Oklahoma	2,098	12 months	150%		58%
Oregon	15,320	6 months	125%/100%	x	48%
South Carolina	2,328	6 months	200%		88%
South Dakota	653	0 months	150%		74%
Tennessee	4,516	6 months	200%	x	79%
Texas	26,908	12 months	200%		70%
Utah	3,715	6 months	200%	x	67%
Washington	3,397	6 months	150%	x	33%
West Virginia	653	6 months	150%		106%
Wisconsin	16,284	6 months	200%	x	61%
Wyoming	687	12 months	200%/135%	x	53%

Source: Kaiser Family Foundation: State Health Facts.