Health Insurance

High-Risk Health Insurance Pools

Many individuals are uninsureable. Their pre-existing conditions indicate that they are so risky either: i) no insurance company would cover them or ii) the premiums would be so high that the individual could not afford them. To insure some of these people, many states have set up high-risk health insurance pools (HRP). Currently, all these pools operate at a loss. This is not surprising; if states could profit from insuring high-risk individuals, than the private market could certainly as well and thus there would be no need for HRPs.

Today I will review some HRP statistics from a 2009 GAO report.


  • Total claims paid by HRPs in 2008 were about $1.9 billion, accounting for almost 95 percent of total HRP expenditures. The average claims per enrolled individual totaled $9,437 in 2008, an increase of about 39 percent since 2003.

Cost Sharing

  • In 2008, the average annual deductible for the most popular plan offered by each of the 34 HRPs was $1,593—almost three times as high as the average annual deductible of $560 among employer-sponsored health insurance plans.
  • 15% of the most popular plans (5 plans) in 2008 had annual maximum coverage limits.  These annual limits ranged between $75,000 and $300,000 and averaged $175,000
  • Almost 90 percent of the most popular plans (30 plans) had lifetime dollar limits, which ranged between $500,000 and $5,000,000 and averaged $1.6 million.
  • Fourteen percent of all HRP enrollees received income-based premium subsidies
  • In 2008, premium revenue contributed 54 percent of HRP funding, and insurance carrier assessments contributed about 23 percent.
  • Federal grants comprised less than 2 percent of total HRP funding in 2008.
  • Most HRPs Most poplar plans have an annual out of pocket limit

Distribution of Enrollees in Most Popular HRP Plans, by Annual Out-of-pocket Spending Limits, 2008

Less than $2,000








More than $10,000






  • Premiums: 54.0%
  • Assessments on health insurance carriers 23.2%
  • Other Assessments: 7.4%
  • State General Revenues: 5.1%
  • Federal grants: 1.7%
  • Other: 6.3%


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