NH risk pools stabilizing after deficits, but legal fights over assessments continue

Kevin Landrigan, The New Hampshire Union Leader, ManchesterNew Hampshire Union Leader

New Hampshire’s three risk pools that manage health, property liability and workers' compensation insurance coverage for municipalities, schools and counties have come through a “rough patch,” but are now on firmer financial footing going forward, Secretary of State David Scanlan said.

Spikes in health insurance spending contributed to a massive deficit for SchoolCare, one of the two pools providing health care coverage along with HealthTrust. Primex is the primary provider of property and casualty and worker’s compensation insurance coverage for governmental units.

“The message is we went through a rough patch, and we successfully maneuvered our way through it,” Scanlan said during a news conference in his office. “I think we can see the daylight.”

Another contributing factor to the increased assessments, Scanlan maintained, was that the risk pools engaged in a bidding war to grow market share, effectively underestimating the money needed to back up all claims.

“In a perfect world, they would be listening to their actuaries” and setting rates accordingly, he said.

“The boards of these organizations have sat down and said, 'If we go a little bit under the actuary suggestion, maybe even a lot more than that, we are going to be able to keep our rates lower and get more communities to join us,’” Scanlan said.

Two other elements that made things more challenging were the sharp rise in health care utilization following the COVID-19 pandemic and the trend of many communities deciding to cover expensive GLP-1 drugs for weight loss, he said.

Two risk pools effectively went bankrupt in recent years — the New Hampshire Interlocal Trust, which provided health care to 3,500 employees in 38 communities, and the Property and Liability Trust, which offered workers’ compensation for about 150 units of government.

Lance Turgeon was appointed receiver of both organizations.

The New Hampshire Interlocal Trust in mid-2025 had no money in the bank and faced $600,000 in pending claims. Turgeon assessed the communities about $2.5 million to pay claims, which included a $600,000 kidney transplant for one public employee.

Scanlan’s Office of Securities Regulation ended up settling with the individual and corporate heads of that risk pool, who agreed to pay $610,000.

Once Turgeon receives pharmacy rebate benefits in the coming year, he’ll end up returning more than $3 million in surplus to the affected communities.

The Property and Liability Trust’s problem will go on much longer since workers’ compensation benefits are paid until an employee’s death. The trust has $12.3 million in assets with $2.7 million in open claims, Turgeon said.

David Lang, Scanlan’s chief of staff, defended the office’s target that these health care risk pools have only 15% in reserves.

That’s because health claims have a “shorter tail” as payments are processed soon after employees receive treatment, he said.

Last month, Gov. Kelly Ayotte vetoed two bills on the topic — one that would allow the risk pools to be regulated by the Insurance Department (HB 1491) and the other to lower the maximum reserves limit to 15% (SB 661).

HealthTrust Executive Director Scott DeRoche said he was glad Ayotte struck down the bill, maintaining its higher reserves of about 20% allowed it to avoid the more serious financial issues other risk pools have faced.

“We never depleted reserves unlike the other two risk pools. We are the only risk pool that never depleted reserves at any time,” DeRoche said.

Scanlan said at 15%, the risk pools should be able to avoid a similar crisis in the future.

“We believe the money should be on the books of cities and towns and not held by a third-party interest. This is all taxpayer and employee and retiree money, and it belongs to them,” Scanlan added.

Scanlan’s office is fighting claims by officials in Dover and Portsmouth that they should not be forced to pay the additional assessment to SchoolCare to cover deficits.

A Strafford County Superior Court judge recently declined to dismiss a lawsuit Dover launched on the subject. Portsmouth paid its bill under protest, but has sought legal clarity on this matter.

“The judge made some rulings that led us to believe he just doesn’t understand the underlying issue there,” Scanlan said.

If the two cities win the case, it could trigger an avalanche of similar suits by other communities seeking to get back the money that had given SchoolCare.

“If it turns out the two large subdivisions aren’t going to pay the bill, the other communities in that pooled risk organization are going to have to make up the difference. If this goes forward there is going to be a point there are no other funds,” Scanlan said. “We aren’t there yet.”

klandrigan@unionleader.com