In the year On September 1, 2022, Maine announced that average health insurance premiums for small businesses will decrease by 0.8 percent from 2022 to 2023. This is the lowest average small group health insurance premium in Maine since at least 2001. As noted below, they are seeing significant increases. The difference is primarily the result of concerted government action in conjunction with the July 2022 Maine Section 1332 state innovation exclusion amendment. This is in line with the long-term and extensive need to improve the capacity of small group coverage Front The article describes Maine’s first-of-its-kind plan.
Maine Small Group Marketing Challenges and Responses
In the year A 2018 Maine State Chamber of Commerce survey found that health insurance costs are the biggest concern of small businesses in the state. This concern was based on recent trends. In the year Between 2013 and 2020, enrollment in the small group market declined by 43 percent. Premiums have increased faster in the small group market than in the individual market. This increase in premiums has led to the risk of a “death spiral” as small businesses drop insurance with relatively healthy workers, which increases premiums and creates market instability.
At the direction of Governor Janet Mills, the Maine Office of Insurance and the Department of Health and Human Services sought input from experts and stakeholders on several proposals to improve state-regulated insurance coverage. In the year At a forum hosted by the governor on August 29, 2019, attendees, Massachusetts officials heard about the 2007 Small Group and Individual Market Consolidation and the District of Columbia’s Small Business Health Options Program (SHOP). Helping small businesses.
These discussions contributed to the development of the Made for Maine health coverage law, Approved unanimously by the Maine State Legislature and signed into law on March 18, 2020. It includes policies to achieve three goals: to simplify and improve cost-sharing structures; Collecting premiums and using federal funding to improve affordability for small businesses; And to tailor the health insurance marketplace to Maine. In addition to the open-choice plans described below, Maine’s state-based marketplace, CoverME.gov, was approved and launched in 2021 and reversed the latest enrollment cuts in 2022. Design of the law for the small group insurance market.
Amendments to Maine section 1332 to consolidate markets and extend reinsurance
By way of background, Maine approved a Section 1332 exemption in 2018 to reactivate its subsidized insurance program starting in 2019, and since then, the state has reduced it from 7 percent to 14 percent in plan years 2019 through 2021. Association (MGARA) collects a quarterly fee for each enrollee from all health plans, including small group plans, to fund reinsurance for the individual market. Because the insurance subsidized by this fee reduces individual market health insurance premiums and thus the Affordable Care Act (ACA) premium tax credit, those federal savings go back to the state as a “pass-through” payment, which is invested in insurance that lowers premiums. As originally designed, insurers paid premiums to MGARA, known as “invisible risk sharing,” for high-risk individual market enrollees who had specific conditions or were voluntarily assigned by insurance companies.
In the year In 2022, Maine received approval for improvements to the Section 1332 crossing. It has two main elements.
First, starting in 2023, it would eliminate provisions of the ACA to facilitate a unified individual and small group market. The goal of the unified market is to give small businesses more stability on premiums, while also increasing benefits for individuals who purchase coverage. their own. A consolidated market has a market-wide index rate for premiums and a risk-adjustment program.
Second, the step-down amendment would allow for the extension of reinsurance to small businesses that buy through the integrated market. Enrollees in the small group market have better health and lower costs than those in the individual market, so joining the market lowers the individual market premium. Therefore, the revised coinsurance would result in greater federal savings or “pass through” payments to the current coinsurance program (which is changing to a common retroactive model in 2022 under the Made for Maine Health Coverage Act). This will both reduce new small group premiums and reduce individual market premiums compared to what they would have been without the waiver.
The aggregation of the markets increases the similarity between individual and group products. The Made for Maine Health Coverage Act directs the Bureau to create Clear Choice Plans, a standardized set of cost-sharing that will apply to individual marketplace plans. In the year Standardized cost-sharing implemented in 2022 will also apply to small group plans in the integrated market in 2023. Maine’s share of small business owners or self-employed workers purchasing health insurance through the private health insurance marketplace CoverME.gov is 28 percent. Among the top in the nation. Product design alignment improves purchasing efficiency for small businesses.
Because this was the first proposal of its kind, two different contracted actuarial analyzes (Gorman and Milliman) and a review of the differences between the two (Wakely) were presented to the federal government and the Maine state legislature. Taking into account trends in the Covid-19 pandemic, the latest independent estimates submitted to the federal government in January 2022 projected premiums to be 8 percent lower on average in the individual market and 6 percent lower than those in the small group market. It has been uninterrupted. These estimates are that enrollment in the individual market is 2.7 percent higher and in the small group market is 5.3 percent higher than the baseline without discounting.
Final 2023 health insurance rates and context
Final rates for August 2022 were better than expected for small businesses, with the average annual change in premiums for the small group down 0.8 percent. Without revisions, this would have been an average increase of 12 percent. According to the Bureau of Insurance, Maine small businesses are projected to save an average of more than $860 per person by 2023, or more than $70 per person per month. The Maine Chamber recently released its 2022 survey, which dropped the cost of health insurance from the number one priority for small businesses to the fifth priority.
For context, Maine’s decline in average small group premiums stands in stark contrast to increases in other Northeast states, which are seeing premium increases. These include an average increase of 9.2 percent in Rhode Island, an average increase of 11.7 percent to 18.3 percent in Vermont, an average increase of 7.9 percent in Connecticut, an average increase of 7.9 percent in New York, and an average increase of 6.6 percent in Massachusetts. percent.
The health insurance industry has criticized the free reform as “increasing premiums” in the individual market relative to the original release. However, both consolidation and Section 1332 reinsurance will undoubtedly reduce individual market premiums compared to the baseline without these policies. The average premium increase of 11.4 percent for 2023 is lower than the 14.7 percent increase without insurance. Moreover, as the pandemic’s inflation and workforce impacts affect health insurance prices, the consumer impact will be mitigated by the extension through the Inflation Reduction Act (IRA) expansion of the American Savings Plan’s premium tax credit. Estimates suggest the extension will save 59,000 Maine residents hundreds of dollars in health insurance premiums, including 15,000 small business owners and self-employed people who purchase individual coverage. In addition, the repeal amendment would result in additional federal pass-through payments to Maine than would be expected under the original reinsurance program, expanding the benefits to small businesses that help pay for the reinsurance program.
The 1332 amnesty amendment isn’t Maine’s only move to support small business. In the year In 2019, the Bureau limited the risk option to stop-loss coverage for self-funded small group coverage. In the year Cover for the family. Since the program began in November 2021 through August 2022, it has saved Maine small businesses and their employees $20 million in health insurance costs. It helped 5,764 small businesses in Maine and 46,348 Maine residents — employees and their families — through June 2022. Funded by state appropriations from the US bailout plan, it expires in 2023.
Here in Maine, we are hopeful that the revised Section 1332 waiver will continue our initial results and, over time, reduce premium growth in the integrated market. Enrollment in the combined market should increase due to Maine Plans and IRAs, improving the health of the risk pool over the next three years. Reinsurance pass-through may be higher than expected following an IRA pass-through. Past experience also suggests that uncertainty is built into the premium in the first years of a new program. This has been an improvement in Maine’s small group market due to policy action. The Mills Administration will continue to work to make health insurance more accessible and affordable for Maine’s small businesses.
Author’s note
Maine’s Section 1332 repeal reform process was a team effort led by Governor Janet Mills and her health policy advisor, Bethany Beausang. Eric Cioppa, Maine’s former superintendent of insurance, and his Bureau of Insurance team were instrumental in developing the plan and are the lead agency in applying for and implementing Maine’s Section 1332 insurance reform and open choice plans. In addition, Meg Garratt-Reed assisted in its development as a policy advisor and subsequently contributed to its operations as director of the Maine Health Insurance Marketplace Office. A team at the U.S. Department of Health and Human Services, Centers for Medicare and Medicaid Services, Office of Consumer Information and Insurance Oversight provided clear guidance and feedback as Maine led the process. And, thank you to the Maine State Legislature for its support.
