Federal Invisible High Risk Pool Study – Methodology


Milliman utilized a number of public and proprietary data sources and systems in the report to examine the impact on individual premium rates, the insured rate, and the cost of such a program.

Their model assumes the following about the program:

  • The individual market is bifurcated into two risk pools and the invisible risk-sharing program only applies to those in the new risk pool. New enrollees are drawn from the previously uninsured, those automatically designated by insurers due to having one of eight prescribed medical conditions, those that voluntarily migrate from an off-exchange insurance plan, those that voluntarily migrate from an on-exchange insurance plan, or individuals that the insurer voluntarily cedes to the program at time of application.
  • The invisible risk-sharing program pays all claims above $10,000 for individuals in the program.
  • Claims in the invisible risk-sharing program are paid at Medicare rates.
  • Insurers transfer 90 percent of premiums to the program for individuals designated for the invisible risk-sharing program.
  • Current ACA plans are closed to new enrollment, but current enrollees are grandfathered and may keep their plans. Current enrollees may also select to join the new pool.
  • The insurance regulation that restricts the age curve of premium variation from 3:1 is widened to 5:1.