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State eyes insurance pool to stabilize high-risk coverage

New Hampshire Union Leader

July 20. 2017 12:53AM

CONCORD — The state Insurance Department is applying to the federal government for $8.2 million and planning to impose a $36.8 million assessment on health insurance companies to stabilize the state's individual health insurance market on the Obamacare exchange at

Just don't call that assessment a tax, says Insurance Commissioner Roger Sevigny. "To call it a tax is misstating what it really is," he said.

Greg Moore, with the conservative policy group Americans for Prosperity, says that's exactly what it is. The assessment would be levied on all companies offering health insurance products in New Hampshire, based on number of lives insured, including many who only offer plans in the group or employer-based market and do not participate in the online exchange for individuals.

"They are passing the hit onto the group market in order to stabilize the individual market," said Moore. "New Hampshire already has among the highest health insurance costs in the country and this will only drive them up higher, making it harder to attract businesses to the state."

Gov. Chris Sununu issued a statement saying he opposes the assessment, but a spokesman for Anthem, the largest insurer in the New Hampshire individual market, said the company supports the move.

Sevigny says assessments that spread the pain of high-cost customers across all insurers were common in the days of the "high-risk pool" prior to Obamacare, formally known as the Patient Protection and Affordable Care Act.

"This sort of mechanism is rather common in health insurance marketplaces in particular," said Sevigny, "because if the health insurance market suffers any sort of instability in one piece of it, that's not good for the whole market. Insurance is all about spreading the risk."

Without some form of intervention, the Insurance Department worries that more insurers will abandon the online exchange and premiums will skyrocket in the individual Obamacare marketplace, which currently serves about 50,000 New Hampshire residents.

With that in mind, the Legislature recently granted the Insurance Department the authority to pursue the kind of stability program that was announced on Wednesday, and set out a process for implementation.

"Right now the individual market is in peril," said Sevigny. "Companies could decide they don't want to do business in New Hampshire, and if nothing is done to help stabilize the market, we've seen what happens in other states. The carriers just leave."

Public hearings scheduled

The proposal calls for what would essentially be a $45 million high-risk pool that insurance companies pay into based on their volume of business, and draw from based on their volume of high-cost claims from very sick patients.

This state-operated reinsurance program would be funded with $8.2 million the state hopes to get from the federal government, with the balance coming from the insurance companies. The $8.2 million is an estimate of what the federal government will save in payments that would otherwise be made to insurance companies with very expensive customers on the exchange.

The program would operate for one year starting on Jan. 1, 2018, with an option to renew for additional years with passage of state legislation.

"The Insurance Department doesn't have the authority to do this unilaterally," said Jennifer Patterson, the department's attorney on health care issues.

The department has to hold public hearings and open a public comment period. After that, the plan has to go before the Joint Legislative Health Reform Oversight Committee for approval. The board of the New Hampshire Health Plan, the legacy board from the days of the high-risk pool, will be involved in the program and must approve it as well.

Federal agencies have to approve the waiver needed to allow the $8.2 million that would have gone to pay certain claims to "pass through" to the reinsurance fund.

Public hearings are scheduled for 1 p.m. Aug. 2 at the Brown Building Auditorium in Concord, and at 1 p.m. on Aug. 3 at the Kilton Library in West Lebanon.

Addressing instability

Assessments on insurance companies in the past for high-risk pools ranged from as low as 10 cents per person insured, to as high as $3 to $4 per person, Sevigny said. The Insurance Department's estimates for the new assessment would be about 5.25 cents per person.

"The carriers will readily acknowledge that doing nothing is not the right way to go," he said.

Anthem, the largest insurer in the New Hampshire individual market, supports the move, a spokesman said.

"We applaud the department for taking steps to help address instability in the individual market," said Colin Manning. "Our understanding is that negotiations with federal officials regarding the waiver application are ongoing, therefore at this time it is too early to determine what impact this would have."

Sununu applauded the department's effort to seek federal funds, but said he opposes the assessment on insurance companies. "I do not support the assessment on health insurance carriers because I fear those costs will be passed along to consumers," he said.

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