We assume that a total of $130 billion goes to financing the risk pool over 10 years, including the entirety of the AHCA’s $100 billion Patient and State Stability Fund; the $15 billion federal invisible risk-sharing program; and the $15 billion of funding earmarked for maternity care, newborn care, mental health care, and substance use disorders. This equals an average of $13 billion that would be available annually for the high-risk pool. It is also a high-end estimate of the total funding that would be available for the risk pool, and means that no funding would be available for the stability fund’s other purposes, including public health efforts or reinsurance to bring down premiums for the broader health insurance market.
Records from the Pre-Existing Condition Insurance Plan, the program that provided coverage to high-cost enrollees until the exchanges became available, show that average annual claims costs were $32,108 in 2012. Given House Republicans’ claims that high-risk pools will adequately cover people with pre-existing conditions, we assume that those enrolled in them would continue to receive ACA-like benefits, including limits on out-of-pocket costs, no denials or higher rates based on health status, coverage of essential health services, and no annual or lifetime limits. After accounting for consumer cost sharing and health insurance companies’ administrative expenses,** we estimate that to sustain the AHCA risk pool, premiums would need to be $31,000 per year.***
For subsidies to cover 68 percent of enrollees’ premium costs, as ACA tax credits do now in the individual market exchanges, the government would have to put up $32.7 billion annually. And even after applying that subsidy, high-cost consumers would still owe $10,000 annually toward premiums.****
While the AHCA funds would defray those costs, they are insufficient to bring premiums down to affordable levels for consumers. The $13 billion per year that the AHCA provides for possible risk pool funding would leave a $20 billion shortfall annually. That gap is too big to be filled in by states, which would already be responsible for contributing to the stability fund. For example, we estimate that Maine would need $213 million each year to fund 10,000 high-risk enrollees, while the AHCA could provide only $84 million. Florida would receive a larger share of AHCA funds, about $1.9 billion per year, but would need to come up with the other $2.8 billion needed to prop up the pool.
https://www.americanprogress.org/issues/healthcare/news/2017/05/02/431698/house-health-care-plan-not-enough-keep-high-risk-pools-afloat/
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