Maine’s three providers of individual health insurance on the Affordable Care Act marketplace have revised their rate requests for 2020, significantly lowering their projected rates.
Previously, the insurers had sought modest average rate increases of 1 percent to 8 percent. Under the revised filings, two of the three insurers are now requesting decreases for individual plans, and the other is seeking an increase of less than 1 percent.
The unexpected easing of individual rates in Maine comes as the Trump administration continues Republican efforts to overturn the ACA, former President Barack Obama’s signature legislative achievement.
The Maine insurers – Community Health Options, Harvard Pilgrim Health Care and Anthem Blue Cross and Blue Shield of Maine – said new evidence has emerged that the ACA health insurance market has stabilized even further since their original rate filings in early June. The stabilization efforts come at a time when the ACA’s legality is being challenged in federal court.
The news was welcomed by Whitney Parrish, policy director for the Maine Women’s Lobby, a 40-year-old nonprofit dedicated to improving the status of Maine’s 678,000 women and girls. The group views access to affordable healthcare as one of its four key policy areas.
“We all know that health care all over the country is wildly expensive, and these costs can and do lead folks into poverty and keep them there,” Parrish said. “These rate decreases suggest stabilization and more access for Mainers in need of coverage.”
She added: “It certainly does not fix the overall problem, but it’s a move in the right direction.”
All three insurers reduced their average rate requests for individual plans. Lewiston-based Community Health went from a 7.7 percent increase to a 0.8 percent increase; Massachusetts-based Harvard Pilgrim from a 1.9 percent increase to a 7 percent decrease; and South Portland-based Anthem from a 1 percent increase to a 2 percent decrease. In recent years, the insurers have requested annual increases of up to 40 percent.
Rate requests for small group insurance plans for businesses, however, remained much higher, with increases ranging from about 8 percent to 19 percent. Advocates for affordable health care in Maine say more work needs to be done to stabilize the ACA small group insurance market.
FACTORS IN RATE REDUCTION
Community Health President and CEO Kevin Lewis said there were two primary factors in his organization’s decision to reduce its rate request: a risk adjustment summary from the U.S. Centers for Medicare and Medicaid Services, also known as CMS, issued on June 28, and additional analysis of Community Health’s own policyholder claims in 2019.
“The official notice of risk adjustment results on June 28 provided the certainty needed – and justification – to back off of some of our conservatism that we had built into the initial filing,” Lewis said. “Same, too, with our observations of utilization trends. Early indications were just that – early – and we needed more time to analyze 2019 development. The additional analysis allowed us to back off of some of our conservative outlook on trend.”
The risk adjustment program administered by CMS was created by the ACA and is designed to reduce incentives for insurers to avoid potentially high-cost policyholders, such as chronically ill patients, by evenly spreading the financial risk among all insurers and helping to stabilize premiums. CMS produces an annual report on the results of the risk adjustment program’s activities during the previous year.
The report is highly technical, but ACA insurers in Maine said the upshot of the latest one is that compensation payments from CMS to insurers to offset high-dollar claims were greater than expected in 2018, giving them confidence to adjust their initial rate filings downward for 2020.
“Harvard Pilgrim’s resubmitted rate request was lower than the original submission primarily due to the 2018 risk adjustment payment … being higher than anticipated, which led to an expectation of a higher receivable in the future,” said Bill Whitmore, Harvard Pilgrim’s Maine market vice president.
Another program at the state level in Maine also has helped stabilize rates, the ACA insurers said. The Maine Bureau of Insurance recently revived a $93 million reinsurance program to help reduce premiums for individual insurance in the ACA marketplace. That program has helped to stabilize the market in Maine and reduce annual rate increases, they said.
In July 2018, CMS granted a waiver that permits the state to diverge from the normal rules set up by the ACA for insurance. The waiver will be effective through 2023. Maine previously had operated a reinsurance program, but it was shelved in 2013 after the ACA went into effect.
Reinsurance is a complex program that involves many shifting costs, but the bottom line is that it’s a way for the state to pump money into the system, reducing risk for insurance companies in exchange for lower premiums for policyholders. Each Maine insurer submitted two sets of rate requests last year for 2019 ACA premiums – a lower one that assumed a revived reinsurance program and a higher one that did not.
According to the Bureau of Insurance, part of the reason insurers lowered their rate requests was that they had time to review an additional period in the first part of this year that included time operating under the reinsurance program, known as the Maine Guaranteed Access Reinsurance Association.
“Ensuring consumers have access to individual health plans that offer greater affordability and access to quality health care remains our focus at Anthem Blue Cross and Blue Shield in Maine,” Anthem representative Stephanie Dubois said. “As such, we revised our initial filing based on further review of the market and the impact of the reinsurance program. We will continue to work with the state and look forward to continuing the regulatory process.”
Maine’s implementation of Medicaid expansion in April also has helped stabilize the ACA insurance market and keep individual rates lower, said Ann Woloson, executive director of the Augusta-based advocacy group Consumers for Affordable Health Care. Woloson said she is “cautiously optimistic” about the direction individual rates are headed, but she noted that the projected rate decreases are only averages, and that premiums for some individual plans in Maine are still expected to increase by as much as 11 percent in 2020.
Woloson also noted that stabilization efforts in the individual insurance market have done nothing to curtail double-digit annual increases in the ACA small group health insurance market for businesses.
Maine’s three ACA individual insurance providers also offer small group insurance plans, as do two other providers, Aetna and UnitedHealth. Average rate requests for ACA small group plans in 2020 remained largely unchanged from the previous filings in June, with increases ranging from about 8 percent to 19 percent.
“Now what we really need to focus on is relief to the small group market,” Woloson said.
David Clough, the state director of NFIB, formerly the National Federation of Independent Businesses, echoed Woloson’s concerns, noting that many of Maine’s small businesses are “just getting hammered” by the repeated double-digit rate increases in the small business healthcare marketplace.
“Some of our members purchase health insurance through the individual market and some through the small business market,” Clough said. “Our members steel themselves for the new rates every year, brace themselves for how much of an increase it will be. This is good news for one group.”
One way to leverage the power of competition in the small group market to bring rates down would be for Maine to create its own state exchange for ACA plans, she said, rather than relying on the federal exchange at healthcare.gov. Woloson said having a separate website just for ACA plans available in Maine would make it easier for businesses to compare plans and find the best value.
ACA CHALLENGED IN COURT
Nearly 71,000 Mainers enrolled in ACA insurance programs for 2019, down from a high of more than 84,000 for 2016. Total enrollment has declined steadily over the past few years.
The ACA’s legality is currently being challenged in federal court. A panel of three federal judges in New Orleans have sharply questioned attorneys defending the ACA, increasing the chances that the 5th U.S. Circuit Court of Appeals may throw out at least part of the 2010 law, according to Tribune News Service.
Two of the three judges on the appeals court panel – both appointed by Republican presidents – repeatedly pressed California’s deputy solicitor general, who is defending the law, to explain why it should remain on the books after Congress in 2017 scrapped a tax penalty against people who didn’t have health insurance. That provision was once deemed essential to the program.
Texas and 17 other mostly Republican states are suing to scrap the entire health care law, including its protections for people with pre-existing health conditions. Also at risk are billions of dollars in federal assistance that have helped millions of Americans get health insurance through Medicaid and state insurance markets.
Staff Writer Penelope Overton contributed to this report.
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