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Maine's New Merged Market

Jul 22, 2022
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The Merger of Maine’s Small Group and Individual Health Insurance Markets Reduces Premiums Near-Term While Standardizing Plan Design for Employers

The CMS announcement on Friday, July 15th of its official approval of the Mills Administration's request to extend the state’s reinsurance program over the combined Individual and Small Group markets provided the final statutory requirement for the establishment of the merging of these markets beginning 2023. This piece explores some of the opportunities and challenges for Small Group health insurance decision-makers and the brokers that support them.

Merged Markets Promise Lower Premiums for Small Groups

Over the past three years, premiums for Small Group health insurance have increased by 31%, according to the Maine Bureau of Insurance. At the same time, due in part to subsidies provided by the ACA, premiums for individual plans have declined. The rise in Small Group health insurance premiums has also coincided with the decline in Small Group enrollments as decision-makers have opted out of providing health insurance for their employees or have pursued alternatives such as level-funded plans which are based on the census and underlying health conditions specific to a given Small Group.

By folding community-rated Small Group health insurance coverage into the Maine Guaranteed Access Reinsurance Association (MGARA), which currently provides reinsurance for the individual health insurance market, the Made for Maine Health Coverage Act will now merge the two “risk pools,” thereby extending the benefit of the reinsurance program to the Small Group market as well. With the pooling of the two markets, the Bureau projects the average change in premiums from 2022 to 2023 will be offset by 6% for small employers in 2023 and by 3.9% in 2024. Small employers are defined as those with fewer than 50 full-time equivalent (FTE) employees.

With a highly competitive job market, this may be just the opportunity for small employers who have been on the fence about offering health insurance to gain a competitive edge by providing health insurance options to attract and retain valuable employees.

“Clear Choice” Plans for Small Groups

Effective in 2022, individual health insurance plans in Maine used one of several “Clear Choice” plan designs with the goal of reducing consumer confusion and to provide an easy way for consumers to compare the plans offered by competing health insurance carriers. Offered in Bronze, Silver, Gold, and Platinum, Clear Choice plan designs have the same deductibles, copays, and co-insurance for medical services regardless of which health insurance carrier provides the coverage, though there may be some differences in provider networks, tier one prescription drugs, and special wellness incentives. With the merger of the Small Group and Individual markets, Small Group will also be required to offer Clear Choice plans effective in 2023.

The good news here is that Small Group employers will be able to shop comparable plan designs among health insurance carriers. Additionally, Small Group coverage benefits may be enhanced, with some plans offering co-pays, but no deductibles for primary care, behavioral health, and urgent care visits. The potential downside of richer benefits is that the application of Clear Choice plans for Small Group may put upward pressure on premium prices, though an employer can always choose between plan levels to manage the costs versus benefits provided.

With Change Comes Potential Confusion

Small groups that have been offering their employees coverage may be surprised to learn that the plan they had in 2022 will no longer be offered in 2023. That is a direct result of the merger of the two markets and the requirement to offer Clear Choice plan designs to small groups, just as they are now offered to individuals. In addition to Clear Choice plans, carriers will be permitted to offer up to three alternative, non-Clear Choice Plans. So small groups may find a plan they like which is considered an alternative plan. It is important to note that the merged market allows small groups the choice of purchasing any plan including those designed for individuals that are on/off exchange, or those designed for small group, which are off-exchange only plans. Individuals have the same purchasing ability.

Resources for Small Groups and their Brokers

Community Health Options, a Maine-based, non-profit health insurer, is committed to the Small Group health insurance market and to providing an easy purchasing experience for small groups and their brokers to navigate the change. For example, Health Options’ top three small group plans have been deliberately mapped over to similar Clear Choice plans to minimize confusion over the changes. Benefits have been carefully evaluated to make sure that Clear Choice requirements are being met, while at the same time offering popular benefits like our chronic illness support program (CISP) acupuncture, and adult vision with certain plans that are in addition to the Clear Choice parameters.

Small group brokers may access Health Options’ broker portal, which provides a tool known as “decision pathway support” to prioritize important benefits and to suggest plans that meet those criteria. Health Options has partnered with Northeast Delta Dental (NEDD) and UNUM to offer “one-stop shopping” to include supplemental plans for adult dental, life, and disability insurance, improving the efficiency for small groups in benefit planning.

Additionally, the Health Options team has been reaching out to brokers and small group employers to educate them about the upcoming changes. They will be holding webinars this fall to help brokers and small group employers prepare for the 2023 enrollment period. Those interested are encouraged to contact Kristy Pendexter, Benefits Consultant, at kpendexter@healthoptions.org or by calling 207-423-8109.

SEE ALSO

As we move from the summer to the winter Olympics, it seems only fitting to talk about bronze, silver, and gold. Like the Olympic metals, types of health insurance plans are categorized into metal levels. Unlike Olympic metal categories, health insurance metals have nothing to do with quality or performance. Rather, health insurance metals help people understand the amount of cost-sharing that goes on between the plan holder and the insurance company in any given plan. (Need a refresher on what cost sharing means? Check out our health insurance lingo blog post here!) 

Remember that the exact amount of cost-sharing can vary from plan to plan. According to healthcare.gov, at each metal level, you’ll pay a different percentage of total yearly costs of your care, and your insurance company will pay the rest. Total costs include premiums, deductibles, and out-of-pocket costs like co-payments and co-insurance.

As a rule, the less the insurance company pays in cost-sharing, the lower the cost of the plan. So, Bronze plans typically have the lowest monthly premium costs and highest costs when you need care. Monthly premium costs generally increase according to metal levels. Silver, Gold, and Platinum cost more each month in premium payments but will have lowers costs when you need care. While your monthly premium price is often the top consideration when purchasing health insurance, it’s important to consider the deductible and cost-sharing as well, since these two factors can impact the total amount of out-of-pocket healthcare costs you might incur in a plan year. The total cost of care is what really matters.

When choosing a plan, you’ll want to think about how much you (and your dependents) are likely to use your insurance coverage. Consider things like how often you see a doctor, what medications you take, and whether you foresee scheduling any elective surgery during the year to come. If you think you’ll use your healthcare plan frequently or have prescription medications you take regularly, you might want to consider a higher metal level that offers lower deductibles and makes your costs easier to predict (like a Gold or Platinum plan). If you don’t expect needing many healthcare services, a lower-premium/higher cost-share plan might be a better fit.

One thing that’s important to know is that ALL Health Options’ plans in ALL metal categories offer $0 cost-share preventive care, including yearly wellness checks. Many plans also offer an array of low-to-no-cost benefits that help offset many healthcare expenses (like wellness visits, prescription benefits, and vaccines), even for people with chronic conditions. All non-HSA plans offer Amwell® urgent care telehealth visits with $0 cost-sharing. So, whether you go for the Gold, qualify for Silver, or choose any of the other plan options, having healthcare insurance is extremely valuable in adding to your quality of life and peace of mind.