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Facing Obamacare Rate Hikes, Insurance Department Wants To Create A 'Reinsurance Program'

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The New Hampshire Insurance Department is seeking a federal waiver aimed at lowering the price of health insurance for next year’s Obamacare plans, but Governor Chris Sununu opposes part of the Department’s idea for how to do it.

Rates for individual policies under the Affordable Care Act are expected to spike next year in New Hampshire by as much as 40%. To try to offset some of those price hikes, the Insurance Department is seeking permission to create what’s called a reinsurance program.

In (very) simplified terms, a reinsurance program creates a pool of money that would then be used to reimburse insurance companies when their policyholders need extremely high-priced medical care. By having this safety net in place for insurers, they can then, in theory, lower their rates. While insurers have already submitted their initial prices for 2018, the Insurance Department says it will ask for new rate filings if the reinsurance program is approved.

The money for the reinsurance pool would come from two sources. First, the state is asking for $8.2 million from the federal government, which would save an estimated larger amount by having to pay out less in subsidies if the sticker price for insurance plans are lower.

The second source of funding would be a fee imposed on all of the the state’s insurance companies, whether or not they sell plans in the individual market through the Affordable Care Act (there are three companies competing in 2018), or in group markets. It’s that provision that has Governor Chris Sununu concerned.

“I do not support the assessment on health insurance carriers because I fear those costs will be passed along to consumers,” writes Sununu in a statement. “I understand this is where the conversation is beginning.”

He continues: “Obamacare is collapsing under its own weight and I appreciate the effort by Commissioner Sevigny and his team to stabilize our market. The federal government also must act but we will do what we can to help Granite Staters who rely on the individual market for their health care.”

As the two sides continue their conversation, the Insurance Department, as part of the waiver process, will also hold public hearings on the plan. The first of those events is slated for August 2nd in Concord, followed by a hearing in West Lebanon on August 3rd. The Department is also accepting written comments through mid-August.

Todd started as a news correspondent with NHPR in 2009. He spent nearly a decade in the non-profit world, working with international development agencies and anti-poverty groups. He holds a master’s degree in public administration from Columbia University.
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