Aiming to help small businesses, Maine will merge public health insurance markets

COURTESY / RESOURCINGEDGE.COM A merger of individual and small group health insurance on Maine’s marketplace could help small businesses increase coverage and hold down premium increases.

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By Staff

The federal government has approved Maine’s plan to improve health insurance for small businesses through a change in the way the state offers coverage through the federal Affordable Care Act, also known as Obamacare.

Maine plans to merge individual and small group coverage markets into a single, pooled market beginning in 2023. State officials believe the change will stabilize the health insurance market, and will extend federal funding through the Maine Guaranteed Access Reinsurance Association — which has stabilized Maine’s individual market since 2019 — to the small group market for the first time.

The plan requires a state innovation waiver from the U.S. Centers for Medicare and Medicaid Services, which last week notified the Maine Bureau of Insurance that its waiver request was approved.

Health insurance premiums are rising in Maine for 2023, as they are across the county. But the state said the federal waiver will result in premiums that are on average 8% lower in the individual market and 6% lower in the small group market.

The change is projected to reverse the trend of high premium increases and declining enrollment in the small group market while continuing to limit price increases in the individual market.

For example, a 40-year-old with a typical small group coverage might have paid $44.02 more each month in 2023, but with the waiver the premium increase will be $15.92, according to a news release.

The individual market serves people who buy insurance on their own with federal financial assistance while the small group market serves employers with 50 or fewer workers.

Maine is the first state in the nation under the Affordable Care Act's 1332 waiver program to provide federally supported reinsurance to both small employers and individuals. The program, supported by federal funding and fees on health insurers, pays for part of the cost of the most expensive health bills, lowering and stabilizing health insurance premiums.

The waiver request was included Gov. Janet Mills’ bipartisan health reform legislation, the Made for Maine Health Coverage Act.

“Small businesses are the backbone of Maine’s economy, providing jobs and crucial benefits like health insurance to tens of thousands of Maine people,” Mills said. “Ensuring that health insurance remains affordable is critical, not only for the health of small businesses but for the health of their employees as well."