Two Insurance Markets, Similar Stories to Tell

Massachusetts and New Hampshire held public meetings this past fall aimed at providing insights into the factors affecting health care costs in their respective states. The Massachusetts Health Policy Commission (HPC) held its sixth annual Cost Trend Hearing on October 16^th and 17^th. The New Hampshire Health Insurance Department (NHID) held its annual hearing at the end of October in order to release and present the preliminary findings included in the 2017 Health Care Premium and Claim Cost Drivers report.

Both states had similar stories to share: health insurance rates are complex, and the longstanding practices of provider contracting, in conjunction with market shifts, including recent federal guidance and policy directives, serve to make price forecasting even more difficult. As open enrollment wraps up, consumers in many states will be seeing the impact of complex health insurance rate-building in the form of a monthly premium. As you will read about below, states are recommending and working to ensure consumers not only understand service-level costs, but have access to real time cost and quality information as they seek out care and utilize insurance.

Massachusetts

Of particular interest was the presentation on day two of the Cost Trend Hearing by the Massachusetts Attorney General Maura Healey and her team in the Health Division. The focus of this year’s exam was the different ways commercial insurance companies pay providers, with insights into inefficiencies attributed to complex payment structures. Additionally, the exam considered whether this was a barrier to price comparison for market participants, which is of particular importance as states move toward providing consumers with price transparency to enable smart consumer health spending. The report, released in advance of the HPC 2018 hearing, details three key takeaways from a close investigation of commercial health insurance payment and contracting methodologies, with recommendations included for policymakers. In summary, the key findings include:

• There continues to be vast variation in the payment methodologies used by payers, with the size of the payer and the type of service leading to even more differentiation. Some services, like hospital inpatient, have seen improvement in cost standardization for large payers;
• Risk contract variations add further complexity to payment methodologies;
• Differences and variation lead to administrative complexity, which does not improve the patient experience and serves as a barrier to accurate price transparency for consumers.

The three recommendations to policymakers included:

• Further study the administrative costs associated with the complex payment methodologies currently utilized by payers and insurance carriers;
• Increase standardization in order to reduce complexity;
• Provide real-time, service-level price transparency for consumers.

As we head into another legislative cycle in the Commonwealth of Massachusetts, it will be interesting to track what, if any, of these recommendations are proposed at the legislative level, as well as any efforts made to implement them, when possible, at the state agency or carrier level.

New Hampshire

Just this week, New Hampshire (NH) publicly released the final report prepared by Gorman Actuarial outlining the main health care premium, as well as claim cost, drivers for 2017. The report included some good news for NH residents, including that 2017 health care premiums were 13% lower than the national average, but the report also foreshadows some additional areas for future policy-making. As many other states are reporting, the average deductible for all enrollees increased from 2016-2017, with a 13.5% increase for Individual Market enrollees with Cost Sharing Reductions (CSRs), but still a lower deductible than the Individual Market with no CSR subsidies. Additionally, the report highlights that the loss of Minuteman Health—the Massachusetts based co-op that offered a low-cost plan option in 2017—may have impacted a drop in coverage, as well as high premium increases. The report estimates that there was a 10% drop in individual market enrollment in 2018. With enrollment numbers from this year’s 2019 open enrollment likely to be finalized as premium payments are made and enrollment effectuated in the coming weeks, the further impact of the wind-down of the commercial coverage option for the NH Medicaid expansion program on the individual market may be preliminary evident, in terms of individual market enrollment.

Both New Hampshire and Massachusetts have stressed the importance of consumer transparency at the service level. New Hampshire has been an early innovator with the New Hampshire Health Costs website providing consumers with the ability to compare both medical and dental procedure costs, as well as search and compare New Hampshire facilities based on the quality of care provided. As more options for consumers for non-ACA health coverage continue to be made available, the stagnant enrollment numbers outlined by NH for 2016-2017 may improve, but the coverage may result in further frustration on the part of consumers who are hit with large deductibles or denied claims under short-term, limited-duration coverage or association health plans. In order to ensure consumers are educated about the health options available in NH, the New Hampshire Insurance Department has been proactive about producing fact sheets and informational guides for consumers, a good option for other states that may be concerned about consumers receiving misinformation.

Published by Margot Thistle

Margot Thistle, Esq. is a managing editor of Health Policy News who has spent much of her career working directly on Affordable Care Act policy and implementation, including having lead plan management operational and policy planning for Vermont Health Connect, a state-based exchange. During her time at PCG, Ms. Thistle has worked extensively with state insurance departments and state agencies on health policy, market stabilization, and regulatory compliance matters. Ms. Thistle provides broad policy and regulatory support to PCG’s other health care clients across the country, analyzing policy and regulatory developments, providing strategic advice relative to regulatory questions, and drafting policy briefs and position papers. Ms. Thistle still has her admission ticket to the signing of Chapter 58 of the Acts of 2006, the historical Massachusetts health reform bill that preceded the ACA. View all posts by Margot Thistle