Risk Corriders

As of January 1st, any insurance company offering individual policies must issue a policy to any legal resident who applies, without regard to pre existing conditions or health status.  Premiums are based only on your zip code, age and whether you smoke.  There are no annual or lifetime caps on how much the insurance company may have to pay.  Other than fraud, the policy cannot be canceled.

There is a risk that only the very sick will ultimately sign up.  Why would an insurance company get involved?

The answer is risk corriders.

If the money paid out exceeds the permitted premiums by more than 5%, the federal government will cover 50 to 80% of those cost overruns.