What Health Insurance Pools Can and Can’t Do

Rick Curtis, Institute for Health Policy Solutions
Ed Neuschler, Institute for Health Policy Solutions


This is archived content, for historical reference only.

It is commonly assumed that purchasing pools have the power to provide economies of scale and negotiate favorable rates with health plans. Yet while pools have the potential to provide small-firm workers with access to coverage and favorable premium rates, creating a successful pool is a challenge.

This 2005 issue brief examines how insurance pools work, the risks they face, and the conditions necessary for a pool to succeed. It explains why pools are not the same as large employer groups, discusses the crucial role health plans play in establishing a successful pool, and describes the ways pools can attain the necessary market clout to succeed.

The authors find that under the right circumstances pools can be effective at meeting cost and coverage goals and expanding insurance choices. However, without attention to basic considerations such as the cohesiveness of a pool’s members and the market environment in which it operates, the mere establishment of more insurance pools will do little to bring down coverage costs or reduce the number of uninsured Californians.

The complete issue brief is available under Document Downloads below.