To see an executive summary click here.

In this brief, we provide an estimate of government and household health care costs for high-risk pools under the American Health Care Act (AHCA). We use two levels of coverage and household subsidies (one similar to that under the Affordable Care Act and one more typical of traditional high-risk pools) and two options for identifying the population eligible for a high-risk pool (one that limits eligibility to those who would experience high claims under standardized coverage [narrower eligibility] and one that adds those with chronic conditions [broader eligibility]). All eligible high-risk pool enrollees are drawn from the population that would experience a gap in insurance coverage and thus could be subject to medical underwriting in the nongroup market, depending upon state policy decisions.

The current version of the AHCA suggests that, if all federal funds that could be used for high-risk pools were drawn down, approximately $128 billion in government funds ($108 billion federal plus $20 billion-state matching dollars) would be available over 9 years. Yet the least expensive option simulated, the one in which high-risk pool eligibility is defined narrowly and lower actuarial value coverage is provided without income related-subsidies, would cost $359 billion over 10 years. This least expensive approach leads to the lowest enrollment, the highest financial burdens for high-risk pool enrollees, and the highest number of uninsured, yet it would cost more than double the government funds under consideration for such a program.