Dave Solomon's State House Dome: Uncertainty likely to persist in health insurance marketplaceBy DAVE SOLOMON
July 30. 2017 12:16AM
AN 11TH-HOUR EFFORT by the state Insurance Department to keep 2018 premium increases for health insurance below 40 percent in the individual market appears to be dead on arrival at the State House.
Members of the joint House-Senate committee assigned to provide health care reform oversight are scheduled to meet again next Tuesday to reconsider the proposal first presented on Wednesday by Insurance Commissioner Roger Sevigny.
Given the outcome of that conversation, it's safe to say the proposal is not going to get the green light, at least not in its current form, which means continued uncertainty in an already skittish health insurance market.
"While I think that all of us would agree there is a problem, it's understandable that we wouldn't all agree exactly what ought to be done," said Sevigny.
The chairman of the Joint Health Care Reform Oversight Committee opposes a key component of the Insurance Department plan, as does Gov. Chris Sununu. Majority Leader Jeb Bradley, who sits on the committee, is lukewarm at best.
The latest iteration of the plan calls for creation of a $45 million high-risk pool that all health insurance companies would pay into based on their volume of business, and would draw from based on their volume of high-cost claims from very sick patients. Knowing that the pool is available, insurance companies would adjust their rates downward.
The program would be funded with $13 million the state hopes to get from the federal government, with the remaining $32 million coming from an assessment on each of the 72 insurance companies that sell health insurance in the state, even though there are only three currently selling in the individual market on healthcare.gov.
The idea is to control rate increases and prevent the remaining three insurance companies from abandoning the online marketplace for individual coverage. Even with the plan in place, premium increases will still be astronomical (32 percent instead of 40 percent), with no iron-clad guarantees that the insurance companies will remain.
Federal funds sought
The big question is how much money the state can get from the federal government, and how soon. The plan presented Wednesday anticipates an $8.2 million contribution, based on projected savings of money that the feds would otherwise have to pay in premium subsidies on the exchange.
In the strange world of government finance, this amounts to the state going to the federal government and saying, "because we are going to save you $8.2 million that you would otherwise pay in tax credits for customers who qualify in the online marketplace, just send us the $8.2 million so we can use it in our stabilization fund."
That calculation applies only to the 50,000 people on the exchange who pay some or most of their own premium. There are another 50,000 people on the exchange who are Medicaid patients, and that's where the real federal money is.
If the state can convince the federal government that a portion of the money that would otherwise be needed to fund expanded Medicaid in New Hampshire can be redirected to the stabilization program, the state could have as much as $100 million to stabilize the market with the federal money and assessment on insurance companies.
While the governor and other leading lawmakers oppose the assessment on insurance companies, most support the idea of applying for the federal dollars, including Sununu.
No white knight
Matthew A. Veno, government affairs manager for Harvard Pilgrim, which has the most paying customers on the New Hampshire exchange, says the federal government is an unlikely life-saver in this scenario.
"The failure of the federal government to fulfill their commitment under the ACA to fund cost sharing reduction payments, promote enrollment through the exchanges, and adequately enforce the individual mandate leaves health plans without answers to many critically important questions and combine to add costs to an already costly population to insure," he told the oversight committee.
"In essence, we would be asked to file new rates based on assumed federal action, when the failure of the federal government to act and implement the ACA is largely the reason we are in this predicament in the first place."
If lawmakers opt for the status quo, which now appears likely, there's still no guarantee against the assessment on insurance companies so many oppose.
Sevigny points out that if the individual market fails, the commissioner is required by law to use his authority to "set up a mechanism to address market failure." That "mechanism" will be an assessment on insurance companies likely to be far greater than the $5.25 per member, per month contemplated in his current proposal.