Health insurance premiums for Maine’s small businesses will drop in 2023

Maine’s small businesses will see a reduction in health insurance premiums next year, the first reduction in premiums since 2001, according to a news release. But Republicans criticized the move as a “game of bullets,” which would temporarily cut wages for small businesses in 2023 while increasing the cost of the individual market over the next few years.

A rate review provided to the Maine Bureau of Insurance for Affordable Care Act and non-marketplace plans shows premiums in the small group market, which includes businesses with 50 or fewer employees, fell 0.8 percent. Some states in the Northeast are experiencing an increase in the market for small groups, including 11.5 percent in Rhode Island, 11.7 to 18.3 percent in Vermont, 14.8 percent in Connecticut and 7.9 percent in New York.

About 52,000 people in Maine get insurance through their employer through the small group market.

Gov. Janet Mills, in a statement on Wednesday, praised the reform that combined small groups with private markets and reduced costs for small businesses. Insurance plans will remain separate for individuals and small businesses, but risk areas from both markets will be combined into one market.

“Thanks to the legislation I drafted and signed, we are reversing the practice of raising the cost of health insurance for small businesses for the first time since 2001. This is a win for Maine’s small businesses and their hard-working employees who rely on the group market. health insurance, and it couldn’t come at a better time,” Mills said in a statement. “As Maine’s small businesses struggle with the cost of inflation, this is one less thing they have to worry about.”

Maine market prices will rise 11.4 percent in 2023, down from Mills management’s earlier estimate of 14.7 percent. Individual plans are sold in the ACA marketplace, while small group plans are sold in the marketplace. Individual plans will be available for purchase starting Nov. 1 pa www.coverME.gov. About 65,000 Americans have private insurance through the ACA.

But Rep. Josh Morris, R-Leeds, the Republican leader of the House insurance committee, told the Press Herald that because of the “partisan” law that the Democrats pursued, “the small premiums (will go down) for a while. It will go up again, depending on the situation.” management is estimating, and people’s prices will be higher than they would otherwise be.”

Morris was referring to a January 2022 report by Gorman Actuarial Inc. A report from the Maine Bureau of Insurance predicted that market premiums would increase 6 to 8 percent annually through 2025 compared to what they would have been had the private and small group markets remained the same. separation. On the small-group side, Gorman’s estimates showed a slight decrease in 2023 at 0.9 percent, almost identical to the actual results.

The projections also show an increase in small groups in 2024 and 2025 with 7.5 percent and 4.5 percent, although the rate of increase was 4 to 6 percent lower per year than before the markets were integrated.

Mitchell Stein, an independent health expert in Cumberland, said the change was “unanimous”.

“It’s good for us to keep money (in the small group market) for a year, but it doesn’t address the cost drivers that will continue to be a problem in the health care system,” Stein said. “This is not a long-term plan.”

Catherine Wygant Fossett, director of the Maine-based Institute for Family-Owned Business, a nonprofit that represents many small businesses, said that “anything that reduces business costs is very important.”

But Fossett said the biggest question for him is whether the reduction is sustainable. Will it be a one-year return on health care costs, or a longer period?

“What about the next five or 10 years?” he asked.

Fossett said many small businesses struggle to afford health care for their employees, and have faced years of rising costs. The small group market has been experiencing declining membership and rising costs — an average increase of 31 percent from 2019 to 2022, according to the state insurance agency.

Consumers are more protected from price increases in the private market because of the federal government’s support for the ACA.

MORE FEDERAL FUNDING IS EXPECTED

The Made for Maine Health Coverage Act of 2020 combined the small group and individual markets and added changes enacted under Gov. Former Paul LePage – Maine Guaranteed Access Reinsurance Association – for the small group market. Mills is running against LePage this year.

Reinsurance protects insurers from costly claims by making someone else pay higher dollar amounts. In the case of Maine, reinsurance subsidies, which help stabilize the market, come from federal funds and payments made by insurance companies.

The changes had to be approved by the federal government, which was passed in July. Maine will receive additional federal funding for MGARA in 2023, but Jackie Farwell, spokeswoman for the Maine Department of Health and Human Services, said the amount is still unknown.

According to Mills’ administration, rates for small groups would have increased by 12 percent without the amendment becoming law and approved by the Biden administration.

“The change in property prices is very encouraging, and it shows the positive results of the combined market, especially in the small group market, which has seen a significant increase in the last few years,” said Timothy Scott, managing director of Maine. Insurance Agency.

State Rep. Heather Sanborn, D-Portland, said that “by unifying the private and small group health insurance markets, we worked to reduce the premiums of people who have insurance through their small employers, so that easier for small businesses to provide insurance and peace of mind. market.”


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