The Structure and Experience of State Risk Pools: 1988-1994

Abstract

State risk pools are state-sponsored plans for persons who want to buy health insurance but are medically uninsurable or unable to find policies at reasonable cost. This article reviews the structure of all pools and describes in more detail the experiences of eight pools. Although pools grew in number and size in the late 1980s, most pools subsequently stabilized in size. The eight risk pools studied had high enrollee turnover; and a small proportion of enrollees accounted for a large proportion of expenditures. All pools experienced losses, and the current methods of financing losses embody undesirable incentives. Continued use or expansion of these pools may require broader methods of covering losses.