Urban Institute Identifies a Set of Policy Options for Insuring Adults with High Health Costs or Chronic Conditions

Analysis of strategies to address skewed health care risks in private health insurance markets

In 2005, researchers at the Urban Institute estimated the out-of-pocket health care expenses for adults with high health costs or chronic conditions and identified a set of policy options for addressing the problem of insuring these individuals. Researchers published their findings in an issue brief and a longer discussion paper.

Key Findings

The researchers identified three approaches to the problem of insuring high-cost individuals that merit further study:

  • Establish statewide purchasing pools open to everyone, with premiums set at the statewide average.
  • Increase federal subsidies to state high-risk pools and establish federal standards for benefits and eligibility.
  • Randomly assign high-risk individuals to private insurers, and provide government subsidies for their care.