Maine to merge individual, small-group health insurance markets – BenefitsPro
The bureau projects that pooling the market will reduce premiums by an average of 8% for individuals and about 6% for small employers in 2023. (Photo: Shutterstock)
Maine will merge individual and small-group insurance markets under the Affordable Care Act in an attempt to create more stable pricing for health coverage. The Maine Bureau of Insurance said the market for individual health insurance has been stable, but premiums for small-group insurance have been rising as enrollment declines.
“The Governor’s Made for Maine Health Coverage Act instructed the Bureau of Insurance to convene a stakeholder group and do the rigorous actuarial work to determine the potential benefit of merging the two markets,” Insurance Superintendent Eric Cioppa said. “The implementation of the merger was delayed from 2022 to 2023 based on input from the stakeholder group to undertake further study, which ultimately strengthened the case for the merger.”
Related: Small-group insurance market remained stable during pandemic, but long-term concerns remain
The merger will pool the risks of the two markets and also put the small-group market into the Maine Guaranteed Access Reinsurance Association, or MGARA, a state-created body that helps provide reinsurance as a way to share the risks of large insurance claims. MGARA initially began in 2012 but was suspended in 2014 and then relaunched in 2019.
About 48,300 people were insured in the small-group market and about 63,000 in the individual market as of last March, according to the bureau. The small-group market has experienced declining membership and rising premiums, with average rate increases of 31% from 2019 to 2022. Meanwhile, premiums for the individual market declined by 14% over the same four-year period.
The bureau projects that pooling the market will reduce premiums by an average of 8% for individuals and about 6% for small employers in 2023. Premiums are projected to decline another 6.1% for individuals and 3.9% for small employers in 2024.
Massachusetts and Vermont also have merged their individual and small-group markets, and North Dakota is considering doing so, according to a report from the Commonwealth Fund.
“Because market conditions can vary substantially by location, consumer options could be enhanced by providing select opportunities to cross this market border in either direction,” the report concluded. “Self-employed individuals might find better unsubsidized prices as a `group of one’ in the small-group market. Or small firms might be able to provide lower-cost coverage by subsidizing workers’ purchase of individual insurance. Policies that ease these market boundaries without substantially harming market conditions may be valuable.”
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