On the Surprisingly Low Cost Of State Catastrophic Health Insurance Programs.

Three states (Maine, Minnesota, and Rhode Island) have had programs to assist any resident in meeting uncovered ‘catastrophic’ expenses. The annual cost of these programs after 4–6 years of experience has been only a couple of dollars per state resident. A reasonable method of forecasting a priori the cost of such a program is shown to yield a much larger cost than actually has occurred. Some of the controllable factors affecting program growth (e.g., the deductible formula) are discussed, along with a variety of influences on the policy decisions at the state level. Finally, the paper warns against extrapolating the low cost of these state programs to federal initiatives in catastrophic coverage. [ABSTRACT FROM AUTHOR]