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Small Business Employee Benefits and HR Blog

30 Second Introduction to State Risk Pool Funding

February 15, 2010
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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%


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