The rules that establish how the Pool’s premium rates are to be determined are set out in Chapter 1506 of the Texas Insurance Code. This statute requires that the Pool determine appropriate rates through a review of the average rates charged by major Texas health insurers for individual health coverage. This average rate is called the “Standard Risk Rate” and the Pool’s actuary updates this Rate twice a year in order to reflect changes in the market, often referred to as “trend.” As a result, the Pool’s rates will increase when market rates go up.

The statute also stipulates that the Pool’s rates must be set at a certain percentage level above this Standard Rate. This difference is referred to as the “multiplier.”

How high above the standard rate must the Pool’s rates be set?

State law requires the Pool to set rates twice as high as the Standard Risk Rate.

Are there any other factors that impact the Pool’s rates?

In addition to the semi-annual trend adjustments to rates, the Pool is also required to make periodic adjustments to the premium rate table to reflect changes related to certain rating categories, including deductible plan, gender, age, tobacco-user status, and geographic location to more appropriately relate the Pool’s rates to the Standard Risk Rate and to reflect the Pool’s actual claims experience.

What can I do to reduce my premiums?

You are allowed to change your deductible plan to a higher deductible once each year. It may be to your advantage to increase your deductible plan, but you need to carefully review the lower premium and compare the savings to the increased deductible associated with a higher deductible plan, and the higher coinsurance associated with the $7,500 plan.

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If you have any questions concerning the Pool’s premium rates, please contact the Pool’s Administrator at 1-888-398-3927.

Updated on: 12/20/2007