VA Pool

Governor Timothy M. Kaine signed a General Assembly bill on June 20 that allows small businesses to collectively purchase health insurance, demonstrating Virginia’s bipartisan efforts to find common-sense solutions to address health care concerns among leaders of the state’s small business community.

House Bill 761 authorizes small businesses, defined as those with fewer than 50 employees, to join together to purchase health insurance coverage for their employees. The legislation also allows small businesses that currently have a coverage plan to increase health insurance options for their employees

CHIP, AHP, MEWA . . . no matter what you call it the end result is the same.

New entrants come in to the plan when it is first established and rates are attractive. As the pool matures and rates start to climb the "good" risks leave for a better deal and the "poor" risks remain. This drives up claims, which in turn drives up premiums even more.

Eventually the plan implodes.

There are ways to minimize or prevent the ultimate collapse but no one ever does what is required to prevent it.