UPDATE: New Hampshire: Important clarifications re. 2019 premiums

2018 MIDTERM ELECTION

Time: D H M S

With just 3 weeks to go before the 2019 Open Enrollment Period begins, the dust has mostly settled on my 2019 Rate Hike Project. Over half the states have provided their final, approved individual market premium changes, and while I haven't found the final rates for the other half yet, their preliminary rates are all on record, so I don't anticipate the needle moving too much at this point.

New Hampshire is among the states which I haven't found final rate changes for yet. The three carriers in the state have requested average price reductions of around 13.5% on average, which is well below the 3.2% increase which is the average nationally, but I still don't know what the state regulators are going to approve.

This makes the following press release rather surprising:

NH Insurance Department to Hold Oct. 30 Annual Public Hearing on Health Insurance Premiums

CONCORD, NH -- The New Hampshire Insurance Department will host its annual public hearing on health insurance premiums and medical care cost drivers from 9 a.m.-12:30 p.m. on Tuesday, October 30, 2018, at the University of New Hampshire School of Law in Concord.

According to state law, the Insurance Commissioner “shall hold an annual public hearing concerning premium rates in the health insurance market and the factors, including health care costs and cost trends that have contributed to rate increases during the prior year.” This year’s public hearing is based on data and information available in 2017.

“The New Hampshire Insurance Department’s annual hearing is an important tool to increase transparency and foster dialogue on health care costs in New Hampshire,” said New Hampshire Insurance Commissioner John Elias. “Each year, we convene health insurance companies, members of state government, and New Hampshire residents to examine what’s behind high health care costs in the state and what can be done about it. I encourage anyone who is interested to attend, either in person or remotely.”

This year’s hearing will include a report on the 2017 data submitted by health insurance companies in New Hampshire. There will be a presentation on provider discount rates and an insurer panel discussion on the impacts of consolidation in the industry. The hearing will include a public comment period.

Um...October 30th seems to be kind of pushing it, given that Open Enrollment kicks off on November 1st...

UPDATE: OK, the New Hampshire Insurance Department wrote me today to clarify that this public hearing has nothing to do with 2019 premium changes:

The annual hearing on premium cost drivers on October 30th is not related to premium rates for this upcoming open enrollment period. This is an annual hearing we hold each fall, required by statue, where we present information about the NH health insurance market landscape based on the previous year’s insurance claims data. This year, we will also include a presentation on a provider discount report and have a panel discussion about consolidation in the health insurance and provider industries.

This is our webpage for information about our previous annual hearings. There are also video recordings from the presentations for 2017 and 2016.

This is the final report on 2016 Health Care Premium and Claim Cost Drivers from last year.

We present a preliminary report at the hearing and accept public comment. It’s based on the previous year’s claims data. We presented this in 2017, but it is based on 2016 claims data.

It appears that you recently signed up for our press releases, so you may not have seen this release from August regarding NH 2019 premium rates.

As referenced in the release, we are a federal partnership state and unable to release final rate information until November 1st.

I do sincerely apologize to the NNID for my error. I kind of suspected it was something along these lines but I should have contacted them to clarify before posting the entry, and I appreciate their providing the information about their annual hearings (which I agree are a good thing).

As for their being unable to release final rate information until November 1st, it sounds like the rules on that vary by state, since some other FFM states have indeed posted final 2019 rates. As farmbellpsu notes in the comments below, some states are likely prohibited from posting final, official rates before Open Enrollment starts due to strict intellectual property laws and so forth.

As for the August press release, that also brings up a couple of other important points:

NH CONCORD, NH - The federal government has published information on proposed rates for New Hampshire’s health insurance exchange (HealthCare.gov) in 2019.

The New Hampshire Insurance Department looks at premiums each year from a market-wide perspective, comparing the median premium for an on-exchange silver-level plan covering a 40-year-old non-tobacco-user. For 2018, the median premium at this level was $504; the median premium at this level for 2019 would be $470, based on the carriers’ proposed rates. If these rates are ultimately approved, this would represent a 6.75% decrease between next year’s and this year’s median premium in the individual market.

This is where it's really important to not only remember the distinction between "median" and "average", but also to look for the additional caveats--that 6.75% reduction specifically refers to an on-exchange Silver plan. Bronze, Gold, Platinum and Catastrophic plans aren't included here, nor are off-exchange Silver plans, which normally probably wouldn't vary much but could make a big difference next year due to the #SilverSwitching factor.

For instance, my own analysis of the preliminary 2019 rate filings by Ambetter, Harvard Pilgrim and Anthem/Matthew Thornton suggests that 2019 premiums are actually dropping by 13.5% on average, when you include all ACA-compliant individual market plans both on & off exchange, weighted by market share.

“Despite uncertainty at the federal level, a modest decrease in premium rates for New Hampshire residents is a move in the right direction,” said Insurance Commissioner John Elias. “Rates are still high, particularly for NH residents who do not qualify for premium assistance, but we will continue to work collaboratively with insurance companies and pursue other efforts to improve market stability in New Hampshire.”

The 2019 rate information released by the federal government details proposed increases to benefit plans that are submitted by insurance companies operating on HealthCare.gov. The New Hampshire Insurance Department is prohibited by law from releasing rate information until Nov. 1, the first day of open enrollment. A benefit plan is a specific plan that a New Hampshire resident would select for enrollment, such as a bronze, silver, or gold level metal plan.

There you have it...NH simply isn't allowed to go public with the final rate changes until November 1st, which I presume is true of many other states as well.

Three companies have filed rates with the intention to offer products the exchange in 2019 for New Hampshire: Ambetter, Anthem, and Harvard Pilgrim. The companies have until Sept. 25 to commit to selling plans on HealthCare.gov for the 2019 plan year.

“While other states are seeing the further collapse of their individual market, New Hampshire providers are anticipating a 6.75% decrease in the cost of premiums,” stated Governor Chris Sununu. “This is a stark contrast to last year’s premium increase of over 50% and is due to our commitment to working with the industry to drive down premiums and make necessary changes to deliver real savings for the people of our state.”

These positive trends are the result of a rigorous effort to stabilize and preserve New Hampshire's individual market. This includes: moving the Medicaid Expansion population to the State’s managed care delivery system rather than the current Premium Assistance Program; providing flexibility in filing deadlines; authorizing the NH Insurance Department and the NH Department of Health and Human Services to pursue any waiver opportunities; strong advocacy of funding the Cost Savings Reduction (CSR) payments; and a commitment to do to providing certainty at the state level.

The Medicaid expansion change is an important factor which I haven't mentioned before. New Hampshire, like Arkansas, has until now had an unusual way of dealing with the ACA's Medicaid expansion provision. Instead of simply adding expansion-eligible adults to their normal Medicaid program, NH instead enrolls those same people into ACA-compliant individual market policies...and then uses the money allocated for Medicaid expansion to pay the premiums, deductibles and so forth. In New Hampshire, the program is called the "Premium Assistance Program":

New Hampshire proposes to implement a mandatory premium assistance program where the state will purchase insurance from Qualified Health Plans (QHPs) on the federally facilitated New Hampshire Health Insurance Marketplace. Individuals eligible for this demonstration program will include: (1) childless adults from ages 19 - 65 with incomes at or below 133 percent of the federal poverty level (FPL), and (2) parents ages 19 - 65 with incomes above 38 percent (for non-working parents) or 47 percent (for working parents) up to and including 133 percent of the FPL. These populations must be neither enrolled in (or eligible for) Medicare, nor incarcerated. QHP premium assistance enrollees will receive the Alternative Benefit Plan through a QHP they select and will have cost-sharing obligations consistent with Medicaid cost-sharing requirements.

This effectively amounts to a 100% FPL-income person enrolling in an extremely highly-subsidized ACA exchange policy, with some additional modifications; the main difference is that the policy is paid for with federal & state Medicaid dollars instead of with the APTC/CSR dollars.

Anyway, starting in 2019, New Hampshire has decided to scrap the PAP program and convert their Medicaid expansion program back over to the "standard" model (unfortunately, they're also imposing enrollee work requirements at the same time, but that's another discussion).

This makes a big difference in the ACA risk pool, because Medicaid expansion enrollees presumably tend to be sicker on average than higher-income individual market enrollees, which means that "offloading" them onto Medicaid proper has the effect of improving the ACA risk pool, thus allowing for lower premiums.

How big of a difference will this make? Well, NH has around 40,000 PAP enrollees at the moment...which is actually slightly more than the number they have enrolled in on-exchange ACA plans. I'm not sure how many off-exchange ACA enrollees NH has, but I'm guessing that at least 40% of NH's total ACA-compliant market consists of PAP enrollees. That could dramatically alter the risk pool.