Highlights and updates
- Open enrollment for 2019 coverage in Maine ended on December 15, although residents with qualifying events can still enroll.
- Short-term health plans are available in Maine with initial plan terms up to 12 months.
- Approved 1332 waiver implemented reinsurance program, reactivated MGARA
- Nearly 71,000 people enrolled for 2019, although enrollment among lower-income residents has likely declined since then as people shift from QHPs to the state’s newly expanded Medicaid program.
- 1% average rate increase for 2019 (would have been lower without federal actions that destabilize the market)
- Insurer participation in Maine’s exchange: Anthem has rejoined the exchange for 2019, after exiting at the end of 2017.
- Cost of CSR added to silver plans, so premium subsidies are larger than they were in 2017. But Anthem’s return to the exchange in 2019 resulted in a slight reduction in the size of premium subsidies.
- Communithy Health Options is one of just four CO-OPs still operational nationwide
Maine exchange overview
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 the few remaining ACA-created CO-OPs (Community Health Options, or CHO), which is one of only four CO-OPs (nationwide) continuing to offer coverage for 2019.
Three insurers — Harvard Pilgrim, Community Health Options, and Anthem — are offering coverage in the exchange for 2019. Anthem had offered coverage in Maine’s exchange in 2017, but opted to leave the exchange at the end of 2017 because ongoing CSR funding wasn’t committed by the federal government (and was ultimately eliminated altogether in October 2017). Anthem enrollees had to pick a plan from Harvard Pilgrim or CHO if they wished to continue to have coverage in the exchange for 2018, keeping in mind that the exchange is the only place premium subsidies and CSR benefits are available.
But for 2019, Anthem rejoined the exchange — despite the fact that the federal government is still not reimbursing insurers for the cost of CSR in 2019. Anthem announced in 2018 that they would rejoin the exchange if Maine’s proposed reinsurance program was approved and implemented for 2019. Federal approval was granted in late July, 2018.
Maine expanded Medicaid as of February 2019 and more than 13,000 Maine residents had enrolled in expanded Medicaid as of mid-March. The expansion was called for in a ballot initiative that voters approved in November 2017, but implementation was delayed until after former Governor Paul LePage — a fierce opponent of Medicaid expansion — left office in January 2018.
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).
Approved 1332 waiver implemented reinsurance and reactivated MGARA
In 2011, Maine implemented the Maine Guaranteed Access Reinsurance Association (MGARA) to provide reinsurance coverage for the individual market. The program was funded by reinsurance premiums paid by insurers, as well as a $4 per member per month assessment on all health insurance plans in the state (except state and federal employee benefits plans).
MGARA helped to stabilize Maine’s individual market starting in 2012, and kept premiums lower than they would otherwise have been. The program was suspended at the end of 2013, to make way for the ACA’s reinsurance program that took effect in 2014. But the ACA’s reinsurance was temporary, and only lasted for three years, through the end of 2016.
Now that the federal reinsurance program has ended, several states have implemented—or will soon implement—their own reinsurance programs, using 1332 waivers to receive federal funding. The idea is that reinsurance results in lower premiums across the board, which means premium subsidies are also lower.
That reduces the amount that the federal government has to spend on premium subsidies in the state, and the 1332 waiver allows the federal savings to be passed on to the state, in order to fund the reinsurance program. The result is lower premiums and more people insured, since coverage becomes more affordable for people who aren’t eligible for premium subsidies and have to pay full price.
In 2017, Maine enacted LD659, which reauthorizes MGARA, but on the condition that the state had to submit and receive federal approval for a 1332 waiver that provides federal pass-through funding for the state’s reinsurance program.
In March 2018, the state published an actuarial analysis of the proposed 1332 waiver, and accepted public comments on the proposal until May 2, with two public informational meetings in April. Following the public comment period, Maine submitted a 1332 waiver proposal to CMS on May 9. CMS determined on June 8 that the application was complete, and opened a public comment period from June 8 to July 8. Federal approval was granted on July 30.
The state re-activated MGARA as of January 2019, providing reinsurance in the individual market (on and off-exchange), using federal pass-through funding in addition to re-activating the $4 per member per month assessment on all health insurance plans in the state. For 2019, federal pass-through funding for Maine’s reinsurance program was initially estimated at $65 million, but was subsequently revised slightly lower, to $62.3 million. The change was primarily due to Maine’s Medicaid expansion, which took effect in early 2019 and switched low-income residents with income between 100 and 138 percent of the poverty level from subsidized private plans to expanded Medicaid (in other words, the federal government no longer has to fund premium subsidies for those individuals, so the state doesn’t get pass-through funding to account for the smaller subsidies that those individuals would have received if they hadn’t transitioned to Medicaid).
Insurers filed two sets of rates for 2018, since rate filings were due before they knew whether the 1332 waiver would be approved. With reinsurance, the average proposed rate increase was 6.17 percent, and without reinsurance, it would have been 9.58 percent. The actuarial analysis of the waiver proposal notes, however, that despite the lower premiums with MGARA in effect, the rate of premium increases in Maine’s individual market over the next decade is still expected to outpace inflation.
Under Maine’s new reinsurance program, which has received approval for federal pass-through funding through 2023, MGARA covers 90 percent of claims that are between $47,000 and $77,000, and it will pay 100 percent of claims that range from $77,000 up to $1 million (this is considerably more generous than the reinsurance programs in some other states; Wisconsin, for example, has a reinsurance program that pays 50 percent of claims that are between $50,000 and $250,000). Maine’s program also includes a condition trigger; when an enrollee has claims associated with one of eight high-cost medical conditions (uterine cancer; metastatic cancer; prostate cancer; chronic obstructive pulmonary disease (COPD); congestive heart failure; HIV infection; renal failure; and Rheumatoid Arthritis), their claims are ceded to MGARA (the insurer gives 90 percent of the enrollee’s premiums to MGARA, and MGARA then pays a portion of the claims for that enrollee).
Enrollment in Maine’s exchange: 2019 and prior years
During the open enrollment period for 2019 coverage, 70,987 people enrolled in private plans (QHPs) through Maine’s exchange. That was about 6.4 percent lower than the prior year’s enrollment, and the third year in a row that enrollment had declined in Maine’s exchange.
According to the actuarial analysis of Maine’s 1332 waiver for reinsurance, the number of people insured in Maine’s individual market was projected to decrease by about 19 percent in 2019, due to the expansion of Medicaid that voters approved in the 2017 election. But Medicaid expansion didn’t officially happen until after open enrollment for 2019 individual market coverage ended.
Maine residents were able to start enrolling in expanded Medicaid in early 2019, and more than 13,000 people had done so by mid-March. Some of them likely have income between 100 percent and 138 percent of the federal poverty level and enrolled in QHPs through the exchange during open enrollment, but have since switched to Medicaid. When the federal government publishes effectuated enrollment data (usually in June or July) for 2019, Maine’s QHP enrollment is likely to reflect a more significant drop than other states (for perspective, Virginia expanded Medicaid as of January 2019, and allowed people to start enrolling as of November 2018; Virginia’s QHP enrollment for 2019 ended up being 18 percent lower than it had been the year before).
Here’s a summary of Maine’s QHP enrollment over the years since the exchange opened for business in the fall of 2013 (all numbers are based on plans purchased during open enrollment; attrition throughout the year means that effectuated enrollment declines throughout the year):
- 44,258 people enrolled for 2014.
- 74,805 people enrolled for 2015.
- 84,059 people enrolled for 2016. Like many other states, 2016’s enrollment was the highest that Maine’s exchange has had to date.
- 79,407 people enrolled for 2017. As was the case in many states, enrollment declined for 2017 due to a variety of factors, including sharply higher premiums for people who didn’t receive premium subsidies and the nascent Trump Administration’s decision to cut advertising funding for the exchange in the final days of open enrollment (President Trump took office January 20, 2017, and open enrollment ended that year on January 31, 2017).
- 75,809 people enrolled for 2018. Average enrollment once again declined nationwide (particularly in states that use HealthCare.gov) for 2018. Premiums grew significantly for people who don’t get premium subsidies, and there was considerable uncertainty about the status of the individual mandate penalty and the ACA itself (after months of GOP-led repeal efforts in 2017). In addition, the Trump Administration sharply reduced funding for exchange marketing and enrollment assistance just before the start of open enrollment for 2018 coverage.
Approved rate increases for 2019 and previous years
As described above, the approval of federal funding for Maine’s reinsurance program (MGARA) did not come until late July, which was well after insurers had to file their proposed rates for 2019. So the Maine Bureau of Insurance had insurers file two sets of rates for 2019: One based on the assumption that the reinsurance program would be implemented, and the other based on the assumption that it wouldn’t.
The rate filings are available via SERFF, and the Bureau of Insurance included the SERFF filing number for each insurer. As was the case in 2018, the cost of cost-sharing reductions (CSR) has been added to on-exchange silver plan premiums for 2019.
And in a significant development, Anthem’s filings stated that the insurer would rejoin the exchange in Maine if the reinsurance program was implemented (federal approval was granted in July 2018, and the reinsurance program took effect in January 2019). Anthem left the exchange at the end of 2017 due to the Trump Administration’s decision to end federal funding for CSR. Anthem continued to offer coverage in the Maine individual insurance market in 2018, but only off-exchange.
The Maine Bureau of Insurance posted an overview of the state’s new reinsurance program, which included the following approved average rate changes for 2019 (based on MGARA being implemented as of January 2019):
- Anthem: a 4.3 percent DECREASE
- Community Health Options: 0.9 percent increase
- Harvard Pilgrim: 2.1 percent increase
At ACA Signups, Charles Gaba calculated a weighted average rate increase of 1 percent in Maine’s individual market for 2019.
It’s noteworthy that Community Health Options’ rate filing indicated that 5 percentage points of their rate increase was due to the repeal of the individual mandate penalty after the end of 2018, and another 5 percentage points was due to the Trump Administration’s new rules expanding access to short-term plans and association health plans. So without those changes, CHO would have implemented a significant rate decrease instead of a slight rate increase.
For perspective, here’s an overview of how premiums have changed in Maine’s exchange in previous years:
- 2014 was the first year that ACA-compliant plans were available, and premiums were essentially an educated guess, as the market had been completely reformed and insurers had no experience on which to base the new rates.
- For 2015, average premiums were the same or slightly lower than 2014 rates. Maine Community Health Options, which won a large percentage of 2014 enrollees, kept its rates flat for 2015. Anthem’s rates dropped an average of 1.1 percent. Harvard Pilgrim was new to the exchange for 2015, so had no applicable rate increase.
- For 2016, average rates in Maine increased by about 0.7 percent. For Community Health Options, rate changes ranged from an average 1.73 percent decrease to a 0.54 percent increase (note that Community Health Options plans for 2016 were no longer for sale in the individual market after December 26, 2015, and in hindsight, the rates that were approved for 2016 were too low). Anthem BCBS, which had “most” of the remaining market share, had average rate changes that ranged from a 1.1 percent decrease to a 5.49 percent increase. Harvard Pilgrim’s average rates decreased slightly for 2016.
- For 2017, rate increases were much more significant (as was the case in most of the country). Anthem increased their average rates by 18 percent, Community Health Options (which had the bulk of the exchange market share) increased their average rate by 25.5 percent, and Harvard Pilgrim HMOs increased their average rate by 21.1 percent.
- For 2018, regulators in Maine initially approved rate increases that were based on the assumption that the federal government would continue to reimburse insurers for the cost of cost-sharing reductions (CSR). But in October 2017, just two weeks before the start of open enrollment for 2018 coverage, the Trump Administration announced that the federal government would no longer fund CSR (but insurers were still obligated to provide CSR to eligible enrollees). Anthem left the exchange at the end of 2017 due to the lack of federal funding for CSR. Community Health Options and Harvard Pilgrim continued to offer plans, but they both added a substantial additional premium increase to silver plans to account for the cost of CSR:
- Community Health Options increased overall prices by an average of 15.8 percent, but their silver plan rates increased by an average of 50 percent (note that despite the much higher silver plan rate increases, the overall average increase for CHO was actually lower in this scenario than it would have been if CSR funding were committed. The insurer’s actuaries confirmed that this was correct, and was based on the expected distribution of plan selections and how the rates would change for each plan; people with silver plans and no premium subsidies would be expected to switch to gold or bronze plans instead, which would have smaller average rate increases).
- Harvard Pilgrim HMOs increased their average rates by 38.3 percent, with silver plans having an average increase of 41.7 to 45.9 percent.
Insurer participation in Maine’s exchange: Anthem rejoined for 2019
In 2019, there are three insurers offering plans in Maine’s exchange: Community Health Options, Harvard Pilgrim, and Anthem. But as has been the case in most states, insurer participation in Maine’s exchange has fluctuated over the years.
In 2014, Community Health Options and Anthem offered plans in Maine’s exchange. Community Health Options was a brand new plan at that point (a CO-OP created under the ACA), and yet it garnered 83 percent of Maine’s exchange market share in 2014.
In 2015, Harvard Pilgrim joined Community Health Options and Anthem, so there were three participating insurers in the Maine exchange.
In 2016, coverage was initially available from all three insurers, but 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 Maine Bureau of Insurance has been publishing monthly reports on CHO’s status since March 2016. You can see them all here.] For the second half of open enrollment, and for all special enrollment periods throughout 2016, only Anthem and Harvard Pilgrim offered coverage. But 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.
Community Health Options once again offered plans in Maine’s exchange as of 2017, along with Anthem and Harvard Pilgrim (Aetna had planned to enter the exchange in Maine for 2017, with plans available in nine of the state’s 16 counties. But three months prior to the start of open enrollment for 2017 coverage, Aetna announced that they were abandoning their expansion plans).
On September 27, 2017, Anthem announced that they would exit the exchange in Maine at the end of 2017, and would not offer on-exchange plans in 2018. Anthem allowed existing members to switch to off-exchange plans (without subsidies) if they wanted to renew with Anthem instead of switching to a plan from another insurer. But for new 2018 enrollees, Anthem only offered one gold plan (off-exchange) in Aroostook, Hancock and Washington Counties. Anthem had about 28,000 individual market enrollees in 2017, but according to their rate filing, they expected that to decrease to about 5,600 in 2018, all of whom would have off-exchange coverage.
Anthem’s announcement was not surprising to anyone who had read their 2018 rate filings, as the insurer clearly stated that their plan was to exit the exchange if cost-sharing reduction (CSR) funding did not continue. The filing described exactly what Anthem ultimately did, including the switch to a gold-level off-exchange plan in Rating Area 4 (Aroostook, Hancock and Washington Counties).
The Maine Bureau of Insurance had asked the state’s three insurers to provide backup filings to be used if CSR funding wasn’t committed for 2018. Harvard Pilgrim and Community Health Options proposed higher rates (details below), but Anthem said that their backup plan was to exit the exchange.
So for 2018, only Harvard Pilgrim and Community Health Options offered plans in Maine’s exchange.
But Anthem confirmed in 2018 that they would return to the exchange in 2019 if the then-proposed reinsurance program was finalized, and it was. So Anthem rejoined the exchange in 2019, and all three insurers are once again offering plans in Maine’s exchange.
Adding the cost of CSR to silver plans means premium subsidies are much larger than they were in 2017 — but they dropped a little in 2019 with Anthem’s return to the exchange
Because Maine’s insurers have added the cost of CSR to their silver plan premiums (as have most insurers across the country), premium subsidies are much larger than they would otherwise have been. The larger subsidies keep the after-subsidy cost of the benchmark silver plan roughly consistent with 2017 (since that’s the whole point of premium subsidies), but it makes bronze and gold plans more affordable than they were in 2017 for people who are eligible for premium subsidies.
As an example, a 50-year-old in Portland who earns $35,000 in 2019 can get a 2019 bronze plan for as little as $68/month after premium subsidies (and the subsidy is $400/month for this individual; not that subsidies vary based on income and the cost of the benchmark plan for each applicant).
In 2017, a 50-year-old in Portland earning $35,000 would have had to pay $214/month for the lowest-cost bronze plan after premium subsidies, because the subsidy would have been just $119/month.
But it’s noteworthy that there were even more bargains to be had in 2018. A 50-year-old Portland resident earning $35,000 in 2018 could get a bronze plan for as little as $26/month, after a $445/month premium subsidy. The subsidies are smaller in 2019 — although still much larger than they were in 2017 — because Anthem rejoined the exchange and took over the benchmark spot (second-lowest-cost silver plan) with a slightly lower-cost plan. Statewide, there was a 5 percent decrease in the cost of the benchmark plan for 2019 in Maine’s exchange, which translates to smaller premium subsidies.
The fluctuation in after-subsidy premiums in 2019 is even stronger at the gold plan level. While a 50-year-old Portland resident earning $35,000 would have had to pay $461/month after subsidies to buy the cheapest gold plan in 2017, they could get the cheapest gold plan for $351/month in 2018. But in 2019, it would be $413/month, due to premium fluctuations and the smaller premium subsidies in 2019.
CO-OP is one of only four still operational nationwide
Maine is one of 23 states where a CO-OP health plan was established under the ACA. Most did not survive; the CO-OP in Maine (Community Health Options, or CHO) is one of just four that are still operational in a total of five states.
CHO has participated in Maine’s exchange from the get-go. In 2014, 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 CHO’s tremendous growth also resulted in substantial losses. 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.
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 Healthcare.gov (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.
(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.
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)
Enrollment was frozen until 2017 enrollment began in November 2016. At that point, 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). Community Health Options still had the largest segment of Maine’s individual market share in 2017, but it had dropped to 42 percent by that point.
Community Health Options had 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.
History of the Maine marketplace
Maine’s health insurance marketplace is operated by the federal government. Then-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.
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.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.