Minuteman says rate lower than expected

Oct. 14--The health insurance carrier with the lowest rates on the Obamacare exchange in New Hampshire announced rate increases between 5 and 9 percent for next year, a fraction of projections it had made in the spring.

The Massachusetts-based Minuteman Health Inc. blamed the faulty projections -- which ranged from 42 to 51 percent -- on limited data it had on the New Hampshire Medicaid patients who will be moving into the private insurance market next year.

The hefty projections have provided fuel for Republican critics of Obamacare. Former Florida governor Jeb Bush noted the increases when the Republican presidential candidate announced his alternative to Obamacare this week.

A Minuteman official said he was confident his company's Marketplace exchange rates will remain competitive despite the increase.

"Our approach has been centered on constructing a narrower network structure with providers who have demonstrated the ability to deliver high-quality care at cost-effective pricing," said Scott Colby, New Hampshire director for Minuteman, a nonprofit, member-governed health-maintenance organization.

With 8,881 individual customers, Minuteman is the second largest insurer on the Obamacare exchange in New Hampshire, according to Insurance Department compilations.

Insurance companies should be announcing their rates in the coming days. The state Insurance Department cannot release information about 2016 Obamacare Marketplace rates until Nov. 1, but companies are free to do so at any time, said Danielle Kronk Barrick, a spokesman for the Insurance Department.

The largest insurer in the state, Anthem Blue Cross, said its rates for 2016 will remain "relatively flat" and the most popular silver plans will see no rate increase.

"Through our responsible approach we've been able to deliver sustainable rates and stability to the market, and that is something we continue to do," Anthem spokesman Colin Manning said in an email.

Two other New Hampshire insurers -- Maine Community Health Options and Time Insurance Company -- had projected double-digit increases earlier this year. Their rates were not available Tuesday.

Minuteman first started selling plans on the Obamacare exchange this year. It heavily advertised low rates, and its rates were used to set subsidy levels for the New Hampshire exchange.

Minuteman said the primary factor for the rate increase was the Premium Assistance Program, the New Hampshire alternative to Medicaid expansion that moves new Medicaid patients to the private insurance market starting next year.

"Introducing a new and different PAP population into the commercial risk pool certainly presented a pricing challenge for 2016," Colby said. "Minuteman would have been looking at a modest rate decrease without this change."

The initial projections were based on limited data available about the PAP population, Minuteman said. Subsequent analysis of more comprehensive data allowed the company to pare down the rate increases.

In January, an Insurance Department consultant in January said that the Medicaid patients would not likely put upward pressure on the insurance rates when PAP kicks in. Wakely Consulting Group said most of the new exchange patients will have had health problems addressed when they first became eligible for Medicaid.

But Minuteman maintained the Medicaid-funded premiums will not cover the full cost of the new members.

"Medicaid is covering the premiums but not the cost of care. Premiums and cost of care are very different things," said Minuteman spokesman Jim Borghesani in an email. "The PAP population is statistically -- and in reality -- less healthy in comparison to general population, so there is a cost of care impact for carriers,"

A spokesman for Gov. Maggie Hassan praised bipartisan health care expansion, saying it provided health care to 42,000 state residents, reduced unpaid bills for hospitals and reduced cost-shifting to businesses and insurance customers.

The expansion also drew numerous insurers into the state, said spokesman William Hinkle in an email.

"Many variables go into the rates set by each carrier, and Minuteman had some of the lowest rates last year," Hinkle said. He said Hassan will work with legislators to reauthorize the program as soon as possible.

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