August 06. 2017 1:26AM

Group plans not immune to ACA: Insurance commissioner warns of wider issues if marketplace fails

State House Bureau

Insurance Commissioner Roger Sevigny 

CONCORD - If the individual health insurance market collapses in New Hampshire, the effects will be felt in the group market as well, where approximately 80 percent of us get health insurance through our employers, according to Insurance Commissioner Roger Sevigny and other members of his team.

"There are so many moving pieces," says Sevigny. "Shifts in these moving pieces can have an impact in every direction."

Sevigny has been warning for weeks about the danger of a market failure on the Obamacare exchange at, where approximately 50,000 New Hampshire residents have purchased individual health insurance policies since Obamacare went live in 2014.

Another 40,000 residents covered by Medicaid also purchase their coverage on the exchange.

A proposal by Sevigny to address market uncertainty through an assessment on insurance companies was rejected by a legislative committee last week.

"From my standpoint this kind of uncertainty is unprecedented," said Sevigny, who was first appointed by Gov. Craig Benson in 2003. "Who knows what Congress is going to do? Congress has just failed again to pass anything. Who knows what the priorities are going to be?"

A market failure would occur if there are no insurance companies willing to offer products on the exchange, or if those who stayed could not take on all of the risk. It's already happened in some parts of Tennessee, where, according to The New York Times, "none of this year's insurers want to sell insurance next year."

New Hampshire could be in the same boat.

Three companies remain

The Granite State online exchange was launched in 2014 with only Anthem providing coverage, but quickly grew to five companies, then shrank to four.

In 2017, four companies are offering products, but one of them, Ambetter, is focused on the Medicaid population, leaving Minuteman, Anthem and Harvard-Pilgrim.

Minuteman, which has already announced it won't be back in 2018, is under receivership in Massachusetts, and the other two companies have still not committed to a return in 2018 despite pressure from Gov. Chris Sununu to make their intentions known.

We may know more about those intentions by Aug. 16, when rates have to be approved by the state and uploaded to the federal database, but the question could remain open until the fall.

"If I were a betting person, I would not place a bet until Sept. 27," said Sevigny. "That's the date by which the carriers have to sign a contract with the Centers for Medicare and Medicaid to be on the exchange."

All of this turmoil is of greatest concern to those who currently have coverage on the exchange, especially the 20,000 New Hampshire residents who have Minuteman policies.

With premiums expected to rise by an average of 45 percent for Anthem and Harvard-Pilgrim, if they even decide to remain on the exchange, the insurance may be too expensive to purchase anyway, causing a rush for alternatives.

Flood of customers

Anything that sends a flood of customers from one part of the insurance market into another can have a dramatic affect across the entire market, and that's what New Hampshire could witness in 2018 and beyond.

If 45,000 people on the exchange suddenly have to enter the private, non-subsidized market for individual health insurance, for example, that will affect rates for everyone already in that market.

"Any time you end up with a shift in these populations going into different markets or new people going into a market, you change the underlying health status of the people on average," says Tyler Brannen, a health policy analyst at the Insurance Department, "and the premium has to be adjusted to the risk."

Small business owners could also have some tough decisions to make.

When the exchanges were launched, many of them cancelled their small group insurance policies and decided to send employees to the online marketplace instead, with some premium assistance.

The traditional small group market that existed before Obamacare in New Hampshire was "fairly robust," according to Brannen. It has since shrunk from about 110,000 to 70,000 as individuals migrated to the online exchange.

"If you have little or no choice for those people to buy products on the exchange, you now have a situation where those small employers may have to reconsider if they will offer insurance and have a covered employee population," said Brannen.

Fluid situation

The situation is so fluid that insurance companies recently asked the Insurance Department if they could file "contingency rates" based on different scenarios.

One big question hanging over the issue is whether President Donald Trump will authorize continued payment of so-called cost sharing reductions in Obamacare designed to lower insurance company losses.

In a bulletin issued on Aug. 1, the Insurance Department told all carriers that contingency rates will not be accepted, and that "Issuers are advised to make their best pricing assumptions knowing what they know today."

Until Aug. 1, the department's opinion was that cost sharing reductions would be paid, and insurance companies should price their products accordingly.

Citing "the legal and practical uncertainty about CSR funding," the department reversed its position on Aug. 1, and said insurance companies could price policies with the assumption that the cost sharing money would not be available.

If the payments are not forthcoming, as President Trump has threatened, the possibility of a market collapse grows even more likely.

"I renew my call to the Trump Administration to fund cost-sharing reductions payments until a sufficient replacement for Obamacare is in place," Gov. Chris Sununu said in a letter to state legislators last week. "Withholding CSRs at this late date as carriers are facing looming deadlines to set their rates for 2018 is compounding this problem."

All taxpayers affected

Kristine Grow, senior vice president for communications with America's Health Insurance Plans, says eliminating the cost sharing payments, without repealing Obamacare, would create something akin to an unfunded mandate on insurance companies.

"If health plans are required by law to offer these lower deductible and cost sharing plans to lower-income people without being reimbursed, this de facto mandate on the private sector will drive up premiums by approximately 20 percent for all consumers who purchase their own coverage," said Grow.

"As a result of these higher premiums, all taxpayers will have to pay more toward the tax credits that still exist to help people buy coverage. Recent studies show that the resulting higher premiums would cost taxpayers $2 billion more than they would have paid if the CSRs were funded to begin with."