Stabilization Funds by State
March 14, 2017 Leave a comment
The consulting firm Oliver Wyman has projected what each state would receive from the American Health Care Act (ACHA) State Stability Fund during calendar year 2018. They are making some assumptions in the distribution but the they seem reasonable. In 2018, the Fund would be 93.5% Federal money and 6.5% state matching money. The goal would be to use these funds to take a significant amount of high cost risk out of the premium paying insurance pool and transfer those costs to the fund. It is a reinsurance fund.
And since it is a reinsurance fund with external money, it will result in lower net premiums. Alaska is an extreme outlier as they are a very high cost state with a single insurer. The contiguous forty eight states have an average Stability Fund cash infusion of $91 per member per month (PMPM). However that is not even distributed throughout the country. There is significant variation from Iowa’s $45.68 PMPM to Wyoming’s $136.19 PMPM cash infusion.
The South overall is better off than the North while the Great Lakes and the Plains are seeing less of the Stability Fund flow to them.
Spreadsheet data is here. Massachusetts and Vermont excluded per Wyman’s calculations. Alaska ($209 PMPM) and Hawaii ($100.90 PMPM) are excluded for visual presentation purposes.