Invisible high risk pools

October 25, 2019

by John McClaughry

The Trump administration and Congressional Republicans are putting together a replacement bill for Obamacare, if it is struck down in a pending court case. One of its provisions will be an idea that was pioneered in Maine, that’s called the invisible high risk pool. Twelve states have already gotten Obamacare waivers to allow them to create these reinsurance programs. Simply put, the state puts the sickest highest cost insured patients into a high risk pool and heavily subsidizes their health care costs.

That reminded me of a proposal made by the Ethan Allen Institute, but of course not acted upon by our legislature, besotted with the dream of single payer health care and extinguishing health insurance forever.

Here was our proposal, one of ten in all to turn health care policy around:.

Sixth: create a state high risk pool to pay the exceptional costs of the one percent of people who are uninsurable because of chronic diseases or disabilities. The cost can be funded by a combination of premiums (typically at 150 percent of normal cost), assessments on insurers (including large firms which self-insure), and dedicated revenues (such as a hospital tax.)

Nine of our ten recommendations went unheeded. The tenth was to abolish Gov. Dean’s Health Care Authority. The legislature did that two years later. Our proposal was published in full in the April 3, 1994 issue of the Rutland Sunday Herald – only 25 years ago.

John McClaughry is vice president of the Ethan Allen Institute. 

 

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The Ethan Allen Institute is Vermont’s free-market public policy research and education organization. Founded in 1993, we are one of fifty-plus similar but independent state-level, public policy organizations around the country which exchange ideas and information through the State Policy Network.
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