February 18, 2020
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Janet Mills proposal would create Maine-based ACA exchange, stabilize flagging small-group market

Natalie Williams | BDN
Natalie Williams | BDN
Gov. Janet Mills speaks during the Bangor Region Chamber of Commerce's Early Bird Breakfast in Bangor in this Dec. 18, 2019, file photo.

AUGUSTA, Maine — Gov. Janet Mills and Democratic leaders in the Maine Legislature unveiled a bill on Wednesday to exert greater control over its Affordable Care Act marketplace and merge individual and small-group markets while aiming to bring down health care costs.

The bill, sponsored by House Speaker Sara Gideon, D-Freeport, and Senate President Troy Jackson, D-Allagash, has been teased since last year. In August, Mills announced that her administration would introduce legislation to allow Maine to manage parts of the exchange. The other parts of the bill include a first-of-its-kind stabilization of the small-group market, and a provision mandating free coverage of yearly primary care and behavioral health visits.

Upon taking office last year, Mills, a Democrat, expanded Medicaid in Maine to cover adults with incomes up to 138 percent of the federal poverty level — a central part of the Affordable Care Act. As of last week, more than 43,000 people were enrolled under expansion provisions.

Speaking alongside Gideon and Jackson at a Wednesday news conference, Mills said she was pleased with the state’s efforts to improve access to health care but that more work was needed on affordability.

“Our health insurance system is still confusing, difficult to use and too expensive,” the governor said.

Maine is among a group of 32 states that rely on the federal government to manage its Affordable Care Act marketplace, while 12 other states manage their own, according to the Kaiser Family Foundation.

The approach Mills wants to take — embraced by six states — would give the state funding to run its own marketing, outreach and enrollment assistance programs, and allow the state to extend the annual open enrollment period. The exchange would still use the federal platform, though Mills has signaled interest in transitioning to a state-run system.

The bill would also enshrine a merger of the small-group and individual insurance markets under an existing federal waiver. They served 126,000 Mainers in 2019, with more than 70,000 people in the individual market and nearly 56,000 in the small-group market, according to Maine Bureau of Insurance data.

Those markets have shifted sharply since before the full implementation of the Affordable Care Act in 2013, when the small-group market was 2.5 times the size of the individual market. Two of Maine’s three insurance companies managing individual plans saw rates go down in 2020, while all six companies serving the small-group market saw increases as high as 19 percent.

Mills’ proposal aims to rescue the small-group market by pooling it with the individual market as of 2022, setting a reinsurance program aimed at holding down costs for people in the merged market using savings that the federal government would realize as a result of the shift. It would also set the cost of certain high-cost health procedures at no more than twice the Medicare rate.

Katherine Pelletreau, the executive director of the Maine Association of Health Plans, a group that advocates for insurers, said she was still “digging through” the proposal. Mills, emphasizing the changes would use federal money instead of state funds, said she anticipates the bill will have “full bipartisan support.”

Signs looked good on that front on Wednesday, when Sen. Robert Foley, R-Wells, who sits on the Legislature’s insurance committee, said he had seen the bill and was awaiting a full briefing on it, but that steps need to be taken to stabilize the small-group market.

“How it’s going to work, how the mechanisms, how the fees are going to work, we’ll work through that,” Foley said. “But the initial look at it, I said, ‘There’s some interesting things here that we can work on.’”


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