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September 12, 2018

New insurance program may increase costs for Maine businesses

Maine businesses will face a spike in the premiums they pay for employee health insurance, because of a state insurance program due to be launched in January.

According to a report by Maine Public, the Maine Guaranteed Access Reinsurance Association is a high-risk pool designed to lower individual insurance premiums for people with expensive health care needs. Some of the funding for the program will come from a $4 per month surcharge on each health insurance policy in the state.

When the program takes effect in 2019, businesses that provide health insurance for their workforce will have to pick up some of the cost. But many aren’t aware of the new charge, Peter Gore, executive vice president of Maine State Chamber of Commerce, told Maine Public.

“For some of them, it’s going to be a seven-figure amount,” he said.

The implementation of the reinsurance program comes sooner than some employers expected, according to Trevor Putnoky, a spokesman for the Healthcare Purchaser Alliance of Maine, a business coalition working to reduce health care costs.

 “There was a lot of discussion that it would be pushed off until 2020, which is I think what a lot of purchasers anticipated,” he said. “But at this point in the year, a lot of budgets are already set for businesses in the state, and the $4 per member, per month tax is a pretty substantial cost increase.”

The state is rushing to offer the reinsurance so that it will hold down premium increases expected for health plans that begin in January. Instead of seeing an average increase of as much as 16%, high-risk individuals could face an average increase of only 2%, Maine Public reported.

 The state received federal approval of the program in July. Details about the implementation are scheduled to be sent to health insurers and administrators this week, and the state will hold a workshop on the new program early next month.

Maine adopted a similar reinsurance program in 2012, but suspended it after the federal Affordable Care Act took effect and made the program redundant. After the federal reinsurance provisions ended last year, the state Legislature reauthorized Maine’s program.

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