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Report: Risk-Sharing Program Could Lower Premiums and Help Those with Pre-Existing Conditions

Updated to reflect revision to the report as of 4.17.17.

Washington, D.C. — The Foundation for Government Accountability is encouraged by yesterday’s passage of the Palmer-Schweikert amendment to the American Health Care Act by the House Committee on Rules.

“We thank Representatives Palmer and Schweikert for their commitment to the promise that Congress will repeal and replace the ACA with a plan that lowers the cost of insurance premiums and ensures access to coverage for individuals with pre-existing conditions,” said Tarren Bragdon, CEO of the Foundation for Government Accountability.

FGA reported yesterday that the Palmer-Schweikert amendment would allow the Secretary of Health and Human services to use $15 billion to create a federal invisible risk-sharing program that, if enacted and structured correctly, would result in lower costs and greater access to coverage.

A study released this morning, conducted by Milliman, found that an FIRSP that mirror’s Maine’s program would, under certain scenarios with two separate risk pools, result in:

  • Lower premiums for all ages
    • Milliman estimates that premiums in the new reformed market would be between 12% and 31% lower.
  • Coverage for those with pre-existing conditions
    • Enrollees that are designated for the program would prompt assistance for high-cost claims once they have exceeded a threshold. Conditions included in this study include chronic obstructive pulmonary disease (COPD), uterine cancer, prostate cancer, metastatic cancer, rheumatoid arthritis, congestive heart failure (CHF), renal failure, and HIV/AIDs.
  • Fewer uninsured Americans
    • The study expects that between 1.3 million and 2.2 million fewer individuals would be uninsured; this scenario would result in a 10% to 20% reduction in the uninsured.

“We served as the actuary for a similar program when it was introduced in Maine in 2012,” said Bill Thompson, principal and consulting actuary for Milliman. “We hope legislators and policymakers find this report educational and informative as they examine potential policy changes at the federal level.”

Last month, FGA detailed Maine’s successful approach to addressing similar challenges. By implementing an invisible risk-sharing program and relaxing premium rating bands, Maine saw significantly lower premiums without those with pre-existing conditions losing coverage.

To read the full study, click here. For an overview of the findings and to learn how FIRSP’s work, click here.

The Foundation for Government Accountability is a nonprofit, multistate think tank that specializes in health care, welfare, and regulatory reform. To learn more, visit


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