High-Risk Pools and the ACA: Funding and Considerations

Federal and state legislators are currently grappling with instability and rising premiums in the Affordable Care Act (ACA) individual markets. A wide range of solutions are under consideration to address these issues. Regulators are considering various forms of high-risk pools (HRPs) or reinsurance programs to subsidize claim costs and reduce premiums.

Wakely analyzed the premium impact of an HRP and the funding required to achieve the potential premium savings.  Our analysis reveals that implementing an HRP, whether stand-alone or invisible, will require approximately $11.7 billion of outside funding in order to reduce premiums by 10% nationwide in 2019.