Maine to merge individual and small group health insurance markets

The bureau predicts market pooling will reduce premiums by an average of 8% for individuals and around 6% for small employers in 2023. (Picture: Shutterstock)

Maine will merge the individual and small group insurance markets under the Affordable Care Act in an effort to create more stable pricing for health coverage. The Maine Bureau of Insurance said the market for individual health insurance was stable, but premiums for small group insurance were rising as enrollment declined.

“The Governor’s Made for Maine Health Coverage Act directed the Bureau of Insurance to convene a group of stakeholders and perform rigorous actuarial work to determine the potential benefits of merging the two markets,” the superintendent said. Eric Cioppa Insurance. “The implementation of the merger was postponed from 2022 to 2023 based on input from the stakeholder group to undertake further study, which ultimately strengthened the case for the merger.”

Related: The small group insurance market has remained stable during the pandemic, but long-term concerns remain

The merger will pool the risks of both markets and also bring the small groups market into the Maine Guaranteed Access Reinsurance Association, or MGARA, a state-created organization that helps provide reinsurance as a way to share the risks of large groups. insurance claims. MGARA started 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 office. The small group market has seen declining memberships and rising premiums, with average rate increases of 31% from 2019 to 2022. Meanwhile, premiums for the individual market have decreased by 14% over the same period of four years.

The bureau projects that market pooling will reduce premiums by an average of 8% for individuals and about 6% for small employers in 2023. Premiums are expected to fall further by 6.1% for individuals and 3 .9% for small employers in 2024.

Massachusetts and Vermont have also merged their individual and small group markets, and North Dakota is considering doing so, according to a Commonwealth Fund report.

“Because market conditions can vary significantly by location, consumer options could be enhanced by providing selected opportunities to cross this market boundary in either direction,” the report concludes. “Self-employed people might find better unsubsidized prices as a ‘group of one’ in the small group market. Or small businesses might be able to provide coverage at lower cost by subsidizing the purchase of individual insurance by workers. Policies that relax these market boundaries without significantly harming market conditions can help.

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