Maine successfully reverses health insurance premium increases for very small businesses and reduces proposed premium increases in the individual market as health insurer rates are finalized for the 2023 plan year
Governor Janet Mills announced today that Maine small businesses will see their first average annual decrease in health insurance premiums since at least 2001.
According to the final weighted average rates (PDF) submitted by health insurance carriers and approved by the Maine Bureau of Insurance for the 2023 plan year, premiums for the small group market — which serves employers with 50 or fewer workers — will decrease 0.8 percent , down from the originally proposed increase of 3.42 percent.
This is the first time average health insurance premiums have declined in the small group market since at least 2001, when these rates began to be tracked consistently, and is a direct result of Governor Mills’ Made for Maine Health Coverage Act, which brought together small group and individual markets and extended Maine Guaranteed Access Reinsurance Association (MGARA) protections to the small group market. The federal government approved the merger through the nation’s first state innovation exemption in July 2022.
The decrease in Maine comes as average small group premiums in many other Northeastern states will increase, including Rhode Island (PDF) by an average of 11.5 percent (according to preliminary filings), Vermont (PDF) by an average of 11.7 to 18.3 percent percent, in Connecticut with an average of 14.8 percent, and in New York with an average of 7.9 percent.
Meanwhile, the final weighted average rate increase in the individual market was 11.4 percent, down from the originally proposed average increase of 14.72 percent. But thanks to the expansion of the American Rescue Plan’s expanded eligibility for premium tax credits through the Inflation Reduction Act, more Maine people than ever before are eligible for financial assistance that will largely protect them from those higher premiums.
Federal tax credits limit the maximum contribution that eligible consumers pay to a percentage of their income, which helps protect them from premium increases. According to the White House (PDF), as a result of the premium credit extension, 59,000 Maine residents could save hundreds on their health insurance premiums, including 15,000 small business owners and self-employed people who buy individual coverage. In addition, 14,000 additional Maine residents could have health insurance next year than they would without the new law. These health insurance premium tax credits are available through CoverME.gov.
Although individual rates are rising significantly across the country for the 2023 plan year due to a number of reasons, such as the continued impact of the COVID-19 pandemic and inflation, Maine’s state innovation exemption mitigates the impact of these influences. Without the exemption, rates would increase an average of 14.7 percent in the individual market and an average of 12 percent in the small group market.
“Thanks to the legislation I proposed and signed into law, we are reversing the trend of steadily increasing health insurance costs for many small businesses for the first time since at least 2001. This is a victory for many small businesses in Maine and their hard-working employees who rely on the small group health insurance market and it couldn’t have come at a better time. As Maine small businesses struggle with the high costs of inflation, this is one less thing they will have to worry about.” said Gov. Janet Mills. “I am proud of this progress under our watch. It builds on my jobs plan initiative, which also lowers costs for small businesses and their employees, and sends the message to Maine small business owners and those interested in starting a business here that we will do everything we can , to protect you.”
“Governor Mills has directed us from the beginning to take action to help small business owners offer their workers affordable health insurance.” said Jeanne Lambrew, Commissioner of Health and Human Services. “This good result for small businesses stems from the collaboration between the Bureau of Insurance and the Office of the Health Insurance Marketplace, bipartisan support from the Maine Legislature, our partnership with Maine’s insurance carriers and consistent, strong leadership from the Governor.” “
“The adjusted premium rates are very encouraging and show the positive impact of the combined market, particularly for the small group market, which has seen a trend of large increases over the last few years.” said Timothy Schott, acting chief of the Insurance Bureau.
Taking effect in March 2020, Governor Mills’ Made for Maine Health Coverage Act helps increase coverage and hold down premiums, saving individuals and small business employees money on health care costs.
“Since day one, our goal has been to make health care more accessible and affordable for working families, small business owners and senior citizens. Together, we have enshrined essential patient protections in state law, passed laws to lower the cost of prescription drugs and improve access to life-saving drugs, and worked to ensure stability, efficiency and affordability in the health insurance marketplace.” said Senate President Troy Jackson, D-Allagash. “Today’s news proves we’re moving in the right direction and delivering for Maine people and small businesses.” We still have a long way to go, but please know that I will continue to do everything in my power to ensure that every Mainer can get the health care they deserve.”
“Governor Mills and her team have worked proactively to make health care more affordable. The cost saving news for employers is big. “Employers want to do everything they can to recruit and retain employees, so benefits like health insurance are critical.” said spokesman Ryan Fecteau of Biddeford. “I applaud Governor Mills’ team and the experts at the Maine Insurance Bureau for having the foresight and creativity to propose the Made for Maine Health Coverage Act, then work with the Legislature to support it. It was a wise move that is paying off.”
“As Senate Chair of the Legislature’s Committee on Health Care, Insurance and Financial Services, I have spent the last four years working to make it easier for Maine people to access affordable health care and to ensure that small business owners like myself , can offer health care plans for their employees. I’ve also seen firsthand how healthcare costs have become a huge challenge for small businesses across the state. That’s why I was proud to partner with my colleagues in the Legislature and the Mills administration on new legislation to cut costs for small businesses and employees.” said Sen. Heather Sanborn, D-Portland. “By unifying the individual and small group health insurance markets, we sought to lower premiums for people insured through their small business employer, make it easier for small businesses to offer insurance, and stabilize the market.” I’m excited that Maine people and businesses will finally begin to feel these savings.”
“Our commission stood with consumers and small businesses, honoring their experiences and needs in our efforts to make insurance more affordable. This kind of cost reduction doesn’t come easy, but this milestone shows we’re on a worthwhile path.” said Denise Tepler of Topsham, chairwoman of the House Health, Insurance and Financial Services Committee. “Making progress on accessibility was our goal. Today, we have proof that it works, with small business insurance costs coming down.”
Under the law, Maine became the first state in the nation under the Affordable Care Act’s 1332 waiver program, which provides federally supported reinsurance to both small employers and individuals. MGARA, supported by federal funding and health insurance company fees, pays a portion of the cost of the most expensive health care bills, reducing and stabilizing health insurance premiums. Maine received approval from the federal Centers for Medicare and Medicaid Services for the release on July 15, 2022.
The Made for Maine Health Coverage Act builds on the work the Mills administration has also done to make health coverage more affordable for small businesses in Maine. In 2021, Governor Mills allocated $39 million through his Maine Jobs and Recovery Plan to launch the Small Business Health Insurance Premium Relief Program, which lowers the cost of monthly health insurance premiums for small businesses and their employees.
Under the program, health insurance companies receive financial assistance to reduce premiums for their small business customers by $50 per covered worker per month and by up to $130 per month for family coverage. The program is expected to run until April 2023.
Maine individuals and families, as well as small businesses, can learn more about their coverage options on Maine’s state-based marketplace, CoverME.gov, a one-stop shop for comprehensive essential medical coverage backed by federal and state protections.