February 15, 2022
As outlined in Governor Mills’ 2020 Made for Maine Health Coverage Act, which passed in the Legislature on a bipartisan basis, Maine Insurance Superintendent Eric Cioppa issued an Order that will merge Maine’s Individual and Small Group Health Insurance markets. This historic action will create more stable pricing in both its Individual and Small Group health insurance markets, starting in 2023.
The merger, which will pool the risks of the two markets and roll the Small Group coverage into the Maine Guaranteed Access Reinsurance Association (MGARA), is projected to reverse the trend of steady premium increases and declining enrollments in Maine’s Small Group Market, while supporting continued stable pricing in the Individual Market.
Superintendent Cioppa has applied to the federal Centers for Medicare and Medicaid Services (CMS) to amend Maine’s 1332 State Innovation Waiver to enable MGARA to support the small group market by sharing the cost of high-impact claims. If approved, the amended waiver will be the first in the nation under the Affordable Care Act’s 1332 waiver program to provide assistance to small employers as well as individuals.
“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,” Superintendent 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.”
Cioppa stated in the Order that he projects “pooling the market and reinsuring the pooled market through MGARA is expected to result in an average premium reduction in 2023 of approximately 8.0% for individuals and approximately 6.0% for small employers, compared to a baseline with separate risk pools and no MGARA reinsurance program. For 2024, the projected premium reductions are approximately 6.1% for individuals and approximately 3.9% for small employers.”
As of March 2021, Maine had approximately 48,300 individuals insured through its Small Group Market, and another 63,000 insured through its Individual Market, reflecting a 21 percent and 24 percent decline, respectively, compared to 2017.
In 2019, Individual Market premiums stabilized due to the original 1332 waiver and the relaunch of Maine’s reinsurance, as well as due to the expansion of MaineCare, while the Small Group Market experienced continued premium increases and declining membership. The average cumulative rate increase in the Small Group market between 2019 and 2022 was 31%. During the same time, the Individual Market saw a cumulative decrease of 14%.
In addition to this merger, the Made for Maine Health Coverage Act also made some of the most common medical visits free or less costly, simplified shopping for a plan, and authorized the State of Maine to fully run its own Health Insurance Marketplace, the platform for enrollment in qualified health plans in the individual market with access to financial assistance. In its first open enrollment for plan year 2022, CoverME.gov enrolled 66,095 individuals, reversing declines in Marketplace plan selections since 2017.