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Maine health insurance marketplace: history and news of the state’s exchange

79k enrolled; Anthem, CHO, and Harvard Pilgrim offering plans in 2017

Maine uses the federally-run exchange, but under the marketplace plan management model, which allows the state to have oversight of the plans that are sold in the exchange. Maine has one of only five remaining ACA-created CO-OPs; despite challenges in 2015 and 2016, the CO-OP was able to enroll more than 3,000 new members for 2017, and is on track for a successful year (more details below).

79,407 people enrolled in plans through the Maine exchange for 2017, down about 5.5 percent from the 84,059 who enrolled the year before. The decreased enrollment is likely a result of the ongoing uncertainty about the future of the ACA under the Trump Administration (more details below), and the fact that the Trump Administration scaled back pre-paid advertising and outreach during the final week of open enrollment.

86 percent of the people enrolled in 2017 plans through Maine’s exchange are receiving premium subsidies.

HHS estimated in 2016 that another 10,000 people could qualify for subsidies in the Maine exchange, but they had off-exchange individual market coverage instead, where subsidies aren’t available.

The average benchmark premium (second-lowest-cost plan) in Maine increased by 15 percent in 2017, which was lower than the national average increase of 22 percent. Since subsidies are based on the cost of the benchmark plan, the subsidies are larger than they were in 2017, offsetting some or all of the rate increases for subsidy-eligible enrollees.

Maine is the only state in the northeastern U.S. that has refused to accept federal funding to expand Medicaid.

Maine’s exchange and the Trump Administration

June 2, 2017 is the rate filing deadline for 2018 plans in Maine. There are currently three insurance companies that offer individual plans through the Maine exchange, but individual markets nationwide are facing considerable uncertainty under the Trump Administration. Rate filings for 2018 — and insurer participation — depend a lot on whether the Trump Administration enforces the individual mandate and agrees to pay insurers for cost-sharing reductions.

House Republicans passed the American Health Care Act (AHCA) in early May, but the future of the bill is still very uncertain, as the Senate is drafting their own version and it remains to be seen whether the two chambers will agree on a bill to send to the President. The House version of the AHCA repeals or changes several important aspects of the ACA, and allows states to roll back several ACA consumer protections. If states choose to allow it, insurers would be able to charge higher premiums for applicants with pre-existing conditions and a gap in coverage, and they would also be able to offer plans that don’t include all of the ACA’s essential health benefits.

Maine was one of only six states that already had guaranteed-issue coverage in the individual market pre-ACA (meaning that applications couldn’t be declined based on applicants’ medical history). But the ACA makes coverage much more affordable for people with income up to 400 percent of the poverty level (that’s the upper income limit for subsidy eligibility). The fact that Maine hasn’t expanded Medicaid under the ACA, however, means that coverage is essentially out of reach for people living in poverty.

The CBO estimated in March (prior to several significant amendments) that the AHCA would result in 24 million additional uninsured Americans by 2024. An increased in Maine’s uninsured rate would be a significant blow to the state’s hospitals — particularly in rural parts of the state — since they’d be required to continue to treat people in emergency situations, regardless of the patient’s ability to pay (that’s due to EMTALA, which predates the ACA). And as would be the case in most states, the negative impact of the AHCA would hit hardest among older, lower-income, and rural Maine residents.

Maine hasn’t expanded Medicaid under the ACA, so the state has not taken full advantage of the ACA’s provisions and would thus not feel the impact of repeal as much as states that are fully utilizing the federal money that was made available by the ACA. For people living in poverty in Maine — and thus ineligible for Medicaid and also ineligible for premium subsidies in the exchange — the situation is unlikely to be significantly improved under the various GOP health care reform proposals. But the people who do currently qualify for Maine Medicaid could face eligibility cuts and benefit reductions if GOP proposals to reform Medicaid are enacted (the AHCA calls for converting federal Medicaid funding from its current open-ended match to either block grants or per-capita allotments — both of which would resuld in less federal funding over the long run).

Average rate changes for 2017

There were five carriers in the individual market in Maine in 2016, including both the HMO and PPO arms of Harvard Pilgrim. Three of them—all except Aetna and Harvard Pilgrim PPO—are continuing to offer on-exchange plans in 2017. Average rate changes (before any subsidies are taken into account) were:

  • Anthem: 18 percent (carrier initially proposed a 14.1 percent average increase, and later increased it to 19.4 percent. But state regulators didn’t approve of the increased profit margin in the second increase. Anthem then filed another average increase of 18 percent, which was approved). The increase impacted approximately 15,650 members.
  • Community Health Options: 25.5 percent (carrier initially proposed a 22.8 percent increase, but later revised the average rate hike to 25.5 percent, which was approved). The increase applied to about 58,750 members.
  • Harvard Pilgrim HMOs: 21.1 percent (the carrier initially proposed an 18.7 percent average increase, but later revised the filing to a 21.1 percent average increase, which was approved). The increase impacted about 7,100 members.

For 2015 and 2016, rate changes in Maine were very small, so the rate changes for 2017 likely caused some sticker shock — although the larger subsidies are offsetting some of the rate increases for subsidy-eligible enrollees, which includes the large majority of Maine exchange enrollees. Two of the ACA’s rate-stabilizing mechanisms (risk corridors and reinsurance) were temporary, and ended at the end of 2016. This was one of the driving factors for higher premiums in 2017.

Community Health Options also proposed eliminating their “Preferred” individual market plan, and mapping existing members to their “Community Choice” product instead. Both plans are PPOs.

For enrollees who receive premium subsidies, the subsidies are offsetting a significant portion of the rate increases for 2017. But people who don’t receive subsidies — including everyone who shops off-exchange — likely saw significantly higher premiums in Maine in 2017.

Aetna canceled plans to join exchange for 2017

Aetna had planned to enter the exchange in Maine for 2017, with plans available in nine of the state’s 16 counties. Aetna offered coverage in the exchanges in 15 states in 2016, and Maine was among five states where the carrier had planned to add exchange coverage for 2017. But in early August—three months prior to the start of open enrollment for 2017 coverage—Aetna announced that they were abandoning their plans to expand into those five states. And they subsequently announced that they would exit the exchanges in 11 states, continuing to offer exchange plans in 2017 in just four states.

Aetna already offered individual market plans in Maine, but only outside the exchange. According to their rate filing for 2017, they hae 700 enrollees in their ACA-compliant Whole Health plan in 2016.

2016 enrollment

During the 2016 open enrollment period, enrollment in private plans through the Maine health insurance exchange reached 84,059 people. By March 31, effectuated enrollment stood at 75,240. Of the people with effectuated coverage at the end of the first quarter, nearly 85 percent were receiving premium subsidies.

For 2015, 74,805 people enrolled in private plans through the Maine exchange during open enrollment, and effectuated enrollments had fallen to 66,828 by the end of March 2015. So the 2016 enrollment represents a 12 percent increase over 2015, and the effectuated enrollment total at the end of March was 12.5 percent higher than it had been the previous year.

Now that open enrollment has ended for 2016, plan changes and new enrollments aren’t available (on or off exchange) unless the applicant has a qualifying event (Native Americans can enroll year-round, as can anyone who is eligible for Medicaid or CHIP).

CO-OP still operational; 48,000 enrolled

Maine is one of 23 states where a CO-OP health plan was established under the ACA. 18 have not survived, although the CO-OP in Maine (Community Health Options, or CHO) is one of five that are still operational.

Community Health Options stopped enrolling individual market members for 2016 in December 2015, and enrollment was frozen until 2017 enrollment began in November 2016. The CO-OP’s average rate increase for 2017 was 25.5 percent, and some plan modifications were made to reduce costs (adult vision and elective abortion coverage were removed, and out-of-network deductibles were increased).

As of February 1, 2017, the Maine Bureau of Insurance reported that CHO’s membership was about 48,000 people. That’s a significant drop from the 84,000 members who were enrolled in February 2016, but the drop was expected, given the enrollment freeze throughout 2016, and the rate increase for 2017. By mid-January, CHO had enrolled between 3,000 and 4,000 new members for 2017, compared with about 12,000 new members who enrolled for 2016. The CO-OP’s higher rates for 2017 meant that they were no longer as price competitive as they had been in prior years, but the lowered enrollment is part of their plan to get back on financially solid ground, since their earlier struggles were tied in part to rapid enrollment growth and higher-than-expected claims.

In February 2017, the Maine Bureau of Insurance reported that CHO’s 2016 incurred claims were slightly lower than anticipated, and noted that “the Company remains optimistic that this favorable trend will continue and the BOI is monitoring results on a weekly basis.”

The Maine Bureau of Insurance has been publishing monthly reports on CHO’s status since March 2016. You can see them all here.

Maine regulators address CO-OP losses in 2015/2016

An HHS report published in July 2015 analyzed the financial and enrollment status of the CO-OPs, and CHO stood out as the only one with a positive net income in 2014. Community Health Options also exceed enrollment expectations in 2014, enrolling 257 percent of their projected 2014 target.

In 2014, one one other carrier – Anthem – competed with the CO-OP for individual enrollments on the Maine exchange, and the CO-OP garnered about 83 percent of the enrollments. In 2015, Harvard Pilgrim joined the exchange, but even with two competitors, Community Health Options still got about 80 percent of the 2015 enrollments.

But the tremendous growth the CO-OP experienced also resulted in higher-than-anticipated claims, and significant losses 2015. According to news reports, Community Health Options lost more than $17 million in the first three quarters of 2015, after making almost $11 million in the first three quarters of 2014. And the losses spiked in the final quarter of 2015; total losses for the year reached $74 million, although only $31 million of that was real losses from 2015; the other $43 million was money that the CO-OP set aside as a “premium deficiency reserve” to cover anticipated losses in 2016.

By the end of the first quarter of 2016, it was evident that CHO was doing better than it had in 2015. Administrative costs had been reduced, and claims were coming in lower than expected. The CO-OP’s cash investments stood at $83.9 million at the end of March 2016, up from $76.4 million at the end of 2015.

Community Health Options is also the only one of the remaining CO-OPs that did not owe money to the federal government for the 2015 risk adjustment program. Instead, Community Health Options received about $710,000 from the federal government under the risk adjustment program (funds for the 2015 year were paid in 2016).

The Maine Bureau of Insurance stepped in as soon as the losses through the third quarter of 2015 were known. By then it was clear that the CO-OP’s 2015 premiums had been set too low, as were the 2016 premiums (which were only an average of 0.5 percent higher than 2015’s rates). But there was nothing that could be done to raise them at that point, since the rates were already locked in until the end of 2016.

The BOI asked the CO-OP to stop selling the underpriced plans for 2016 as soon as possible, but December 26th was the soonest CMS could remove Community Health Options’ products from (the CO-OP only accepted new individual enrollments through their own website until December 15). After December 26, Community Health Options ceased all new individual enrollments for 2016. They continued to enroll groups for 2016 though.

By the end of February 2016, CHO’s total enrollment stood at 84,269 (individual and group combined), which was a 12.4 percent increase over their total enrollment at the end of 2015. The total enrollment was higher than CHO had planned when they decided to cease enrollment for 2016, due to the amount of time it took for to remove the CO-OP from the enrollment platform.

In February 2016, the BOI proposed a plan to put CHO into receivership and terminate roughly 15 to 20 percent of the carrier’s individual plan enrollments in order to stem the losses that were expected for 2016. The BOI was going to work with Anthem and Harvard Pilgrim to transition the terminated members to other plans, while ensuring that they wouldn’t have to meet their out-of-pocket costs again on the new plan if they had already done so early in the year with their CHO coverage. However, the federal government rejected the BOI’s proposal, citing the fact that ACA-compliant policies must be guaranteed renewable (they can be terminated, but only if all the plans are terminated – individual enrollees cannot have their plans terminated while the same plans remain in force for other members)

Most of the CO-OP’s enrollees were in Maine in 2016, although some were in New Hampshire (Community Health Options expanded to New Hampshire in 2015, and the CO-OP ceased new individual plan enrollments in New Hampshire on the same schedule they used in Maine; for 2017, they pulled out of New Hampshire altogether). The CO-OP still had the majority of the 2016 individual market share in Maine, despite ceasing enrollment mid-way through open enrollment for 2016.

CEO Kevin Lewis noted that they “need to be responsible and work within the reserves that we have available.” The CO-OP renewed all existing members from 2015 — unless they opted to switch to a different carrier during open enrollment — and Lewis has said that the CO-OP is “not in the slightest” danger of closing. His projection was that Community Health Options will start selling new plans again “at some point in the not-so-distant future” — which ended up being November 2016, for plans effective in January 2017.

Average benchmark plans less expensive in 2016

84.9 percent of the people who had effectuated coverage as of March 2016 through the Maine exchange were receiving premium subsidies. Their average subsidy is $342 per month. At the end of open enrollment, the average pre-subsidy premium for subsidy-eligible enrollees was $428/month, while their average after-subsidy premium is $103/month. So the average subsidy amount climbed from $325 per month to $342 per month by the end of March, indicated that the people who didn’t keep their coverage (or pay for it in the first place) were those who were receiving smaller subsidy amounts.

In 2015, 89 percent of Maine enrollees qualified for premium subsidies. Their average pre-subsidy premium was $425/month, and their average after-subsidy premiums was only $93/month.

Without accounting for subsidies, the three carriers in the Maine exchange all had very modest overall rate changes for 2016:

  • Community Health Options (a CO-OP, originally called Maine Community Health Options), which has about 80 percent of the market share in the exchange, proposed a 0.5 percent increase. Rate changes were approved as filed, and range from an average 1.73 percent decrease to a 0.54 percent increase (note that Community Health Options plans for 2016 are no longer for sale in the individual market after December 26, 2015, and in hindsight, the rates that were approved fro 2016 were too low).
  • Anthem BCBS had “most” of the remaining market share, and proposed a 5.7 percent average increase. Average approved rate changes ranged from a 1.1 percent decrease to a 5.49 percent increase.
  • Harvard Pilgrim Health Care proposed a 4.8 percent decrease, and’s quoting tool confirms that Harvard Pilgrim’s rates are indeed lower in 2016 than they were in 2015.

Kaiser Family Foundation compiled data on benchmark plan (second-lowest-cost Silver) premium changes in major cities across the country. In 2015, the average pre-subsidy benchmark premium for a 40-year-old non-smoker in Portland was $282/month. In 2016, it’s only 1.1 percent higher, at $285/month. But state-wide, the average benchmark premium in Maine is 1.2 percent less expensive than the average benchmark premium in the state in 2015. Keep in mind that the benchmark plan can be offered by a different carrier from one year to the next – the designation just means it’s the second-lowest-cost Silver plan for a given area in a given year.

The very small overall rate change is particularly significant in Maine given the fact that it’s the second year in a row that their overall rates have been almost unchanged.

The individual market in Maine includes five carriers, but two of them (HPHC and Aetna) only offer plans outside the exchange in Maine in 2016. Starting in 2017, Aetna’s plans will be available on-exchange in nine of the state’s 16 counties.

Universal health care study vetoed

In June 2015, Maine lawmakers passed LD384, a bill to study options for universal health care in Maine that would be compliant with the ACA. The bill called for consultants to develop at least three ACA-compliant universal health care designs and submit them to the legislature by December 2016. It also made available $100,000 in federal grant money for the study, to be dispersed by the end of June 2016. The final proposal was to include at least one of each of the following models:

1.  A government-funded single payer system that only allows private health insurance to cover supplemental benefits, with no private coverage available for benefits covered by the single-payer system.

2.  A government administered that incorporates integrated health care delivery and payment.

3.  A “public health benefit option” run by the state, but with the option for people to select either the public option or private health insurance.

But Governor Paul LePage was unimpressed with the legislation, and vetoed it on June 26. In his veto, LePage called the bill “one of the least Republican measures I have seen during my tenure as Governor,” and a “charade.” He also expressed the opinion that government-run healthcare is a “fiscal folly” and reminded lawmakers of Vermont’s failed efforts to enact a single-payer system.
LePage has been at odds with Democratic lawmakers recently, announcing in May 2015 that he would veto every bill sponsored by a Democrat unless the Democrats agree to LePage’s proposal to amend the state constitution to eliminate Maine’s income tax. So while a bill to generate proposals for universal healthcare is admittedly pretty far to the political left, it appears that any legislation sponsored by Democrats in Maine is currently needing a two-thirds majority (to override a veto) in order to pass.
Lawmakers did not have the votes to override LePage’s veto of LD384 (the final vote to override the veto was 18 in favor, 17 against). Although single-payer advocates have been vocal across the country, forward progress on measures to implement single-payer programs have been very limited so far. But Colorado will have a single-payer initiative on the ballot in 2016.

2015 enrollment

A much larger percentage of eligible Maine residents opted to enroll in medical insurance through in 2015 compared to 2014. Nearly 60 percent of eligible Maine residents (about 74,805 of 124,000) purchased coverage in 2015 versus just 36 percent in 2014. About 80 percent of them selected Community Health Options, an ACA-created CO-OP.

By the end of June, effectuated enrollment had declined to 66,828 (attrition is a normal part of the individual market; nationwide, effectuated enrollment declined during the second quarter of 2015, as the marketplaces stepped up their enforcement of documentation requirements for enrollees’ immigration and financial status). Nearly 89 percent were receiving premium subsidies, and 58 percent were receiving cost-sharing subsidies (available to reduce out-of-pocket exposure on silver plans for enrollees with incomes up to 250 percent of the poverty level).

Higher tax penalty if you were uninsured in 2016 and/or remain uninsured in 2017

The penalty for not having insurance went up again in 2016 (penalty payments are assessed when you file your tax return, so for 2016, they’ll be assessed in the spring of 2017). If you don’t qualify for an exemption, you’ll have to pay the higher of:

  • 2.5 percent of annual household income. The penalty can never exceed the national average cost for a bronze plan. For 2016, Revenue Procedure 2016-43 set the maximum penalty to $2,676 for a single individual, and $13,380 for a family of five or more, if they were uninsured in 2016. Note that the cap would only apply to very wealthy households, since 2.5 percent of most households’ income is far less than these amounts.
  • $695 per adult or $347.50 per child under 18. The maximum penalty under this method is $2,085 per household. This amount is subject to inflation each year after 2016, but the IRS confirmed that there would be no inflation adjustment for 2017, so $695 per uninsured adult continues to be the flat-rate penalty in 2017.

Although there were still 33 million uninsured people in the US in 2014, the IRS reported that just 7.5 million tax filers were subject to the penalty in 2014 (out of more than 138 million returns). According to IRS data, 12 million filers qualified for an exemption (you can see a list of exemptions here). For 2015, even fewer people were subject to the penalty. The IRS reported in January 2017 that 6.5 million tax filers paid an average of $470 in penalties for being uninsured in 2015.

This penalty calculator can help you figure out how much you may have to pay if you weren’t covered during 2016 or remain uninsured in 2017

2015 rates and insurers

According to the Maine Bureau of Insurance, Maine Community Health Options (MCHO), Anthem Health Plan of Maine, and Harvard Pilgrim Health Care offered about 40 individual polices through the exchange in 2015. These three insurers also offered policies to small businesses through the SHOP exchange. Harvard Pilgrim was new to the Maine marketplace in 2015.

Aetna only offered plans outside the exchange in 2015 (that’s also the case in 2016). Mega, a Texas-based insurer, withdrew from the Maine market at the end of 2014.

Average premiums for 2015 were the same or slightly lower than 2014 rates. MCHO, which won a large percentage of 2014 enrollees, kept its rates flat for 2015. Anthem’s rates dropped an average of 1.1 percent.

Uninsured rate dropped after 2014 open enrollment

According to a Gallup-HealthWays survey, Maine’s uninsured rate was 16.1 percent in 2013, and had dropped to 9.4 percent by the first half of 2015.

Although enrollment in private plans through the exchange stood at nearly 67,000 people in mid-2015, the state’s refusal to accept federal funding to expand Medicaid means that the uninsured rate is still considerably higher than it would be if Medicaid expansion were in place.

History of the Maine marketplace

Maine’s health insurance marketplace is operated by the federal government. Gov. Paul LePage announced the state’s decision against a state-run model in November 2012. In a letter to then HHS Secretary Kathleen Sebelius, LePage said the Affordable Care Act has “severe legal problems” and state-run exchanges will be “actually controlled” by the federal government.

LePage’s administration did explore creating a state-run exchange. The governor appointed an advisory committee, and in September 2011 that committee recommended that Maine implement a state-run exchange. The committee also issued recommendations as to how the exchange should be structured and governed. However, Maine ultimately joined the Supreme Court case that attempted to overturn the Affordable Care Act, and the state legislature failed to pass exchange legislation in both 2011 and 2012.

No Medicaid expansion

Maine is the only state in the north-eastern US that has not expanded Medicaid. It’s also got the highest uninsured rate in the north-east, and Washington County still has 14 percent of its residents without health insurance coverage.

Democrats in the Maine Legislature have pushed for Medicaid expansion, but could not overcome Gov. LePage’s ongoing opposition on the issue. LePage has vetoed five Medicaid expansion bills. The November 2014 election offered hope for a turnaround on Medicaid expansion, with two challengers supporting expansion and LePage was considered vulnerable. However, LePage was returned to office.

Maine has provided Medicaid coverage to low-income young adults age 18 – 20 since 1991, but LePage had proposed eliminating coverage for 19 and 20 year old non-disabled adults as a way to save the state $3.7 million in Medicaid costs. A federal appeals court prevented that change in late 2014, and in June 2015, the Supreme Court declined to hear Maine’s case. As a result, 6,500 young adults in Maine will be able to keep their Medicaid coverage.

But there are 24,000 adults in the coverage gap in Maine; they don’t qualify for Medicaid because the state has not expanded the eligibility guidelines, but they also don’t qualify for premium subsidies in the exchange because their income is under the poverty level. Until the state expands Medicaid, those people have no realistic access to health insurance coverage.

Maine health insurance exchange links


State Exchange Profile: Maine
The Henry J. Kaiser Family Foundation overview of Maine’s progress toward creating a state health insurance exchange.

Maine Quality Forum

 Maine Bureau of Insurance