Financing Health Care Risk

September 1995
EBRI Issue Brief #165 | Special Report SR-30
Paperback, 20 pp.
PDF, 276 kb
Employee Benefit Research Institute, 1995

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Executive Summary

  • This EBRI Issue BriefSpecial Report is based on two Employee Benefit Research Institute-Education and Research Fund (EBRI-ERF) educational briefings held in March 1995. The purpose of the briefings was to provide an understanding of the role of risk and solvency in the health care system. The speakers for both briefings were provided by the American Academy of Actuaries.
  • At the first briefing, Donna Novak, ASA, with the Blue Cross Blue Shield Association, presented definitions of terms dealing with insurance and risk, and William Bluhm, FSA, with Milliman & Robertson, discussed the major constructs of health plan types and how risk moves through the constructs. At the second briefing, William Thompson, FSA, with Milliman & Robertson, discussed basic issues surrounding health plan solvency, and Peter Perkins, FSA, with Trigon Blue Cross Blue Shield, discussed the factors involved in implementing solvency standards.
  • The first section of this report, based on William Bluhm's presentation, discusses what is risk for health plans and who takes the risk. The next two sections are edited versions of the presentations given by William Thompson and Peter Perkins and discuss solvency issues related to health care plans. The last section of the report is an excerpt from the American Academy of Actuaries' glossary of insurance terms as presented by Donna Novak.