June 23, 2018
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Bill would add smallest employers to health insurance high-risk pool

By Jackie Farwell, BDN Staff

AUGUSTA, Maine — A provision of Maine’s controversial health reform law would be expanded under new legislation to include the state’s smallest businesses, in an effort to lower their insurance costs.

The reform law, passed last spring in the wake of heated partisan debate, overhauled the health insurance market for about 40,000 people who buy coverage through the individual market or through employers with fewer than 50 workers, known as the small group market. It also created a separate pool to cover the sickest residents in the individual market.

Now, a new bill seeks to include businesses, specifically those with fewer than six employees, in the high-risk pool. A public hearing on the bill, sponsored by Sen. Jon Courtney of Springvale, the Senate Republican majority leader, is scheduled for Wednesday before the Legislature’s Insurance and Financial Services Committee.

“Some of the very small groups weren’t getting the full benefits as soon as we would like,” Courtney said.

Under the law, microbusinesses will be hit by greater premium fluctuations than their larger counterparts, according to an independent consultant’s report presented to lawmakers last month. Including them in the pool, known as the Maine Guaranteed Access Reinsurance Association, could alleviate that variability, Courtney said.

The high-risk pool is funded primarily by a fee charged to nearly all private policyholders in the state. Insurers also pay a fee for each member they relinquish to the pool.

Expanding the pool to include microbusinesses would presumably cost more, though the bill doesn’t address additional funding.

“We need to help those microbusinesses afford their health insurance,” said Rep. Sharon Treat of Hallowell, the ranking Democrat on the Insurance and Financial Services Committee. “Whether this approach is sustainable financially is an open question.”

Treat pointed to the consultant’s report, which predicted a $12 million deficit if the state includes microbusinesses in the reinsurance pool.

The report, prepared by Gorman Actuarial of Massachusetts, includes a number of assumptions because lawmakers haven’t fully ironed out the health reform law’s implementation.

Maine’s law also allows insurers to set rates based on a business’ size. The federal Affordable Care Act does away with group size rating in 2014, however, putting serious time pressure on the proposal to expand the risk pool, said David Clough, Maine director of the National Federation of Independent Business.

“The idea, on one hand, sounds good,” he said. “On the other hand, it seems difficult to achieve.”

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