While Mainers still reeling from health insurance hikes, insurers propose more

Kennebunkport resident Kristin Fuhrmann-Simmons saw her family's health insurance costs increase ten-fold after Congress last year failed to extend pandemic-era tax credits for plans purchased on the marketplace. Next year, she's facing another potential 20% increase, this time due to a proposed hike by her insurance provider.

"I didn't know that the cost of care could get any worse," Fuhrmann-Simmons said. "I had no idea that they were going to say, 'Now we need to increase it again.'"

"My God," she added, "this has been difficult this year. What's it going to look like next year?"

Four health insurance companies offering plans on Maine's marketplace, CoverMe.gov, have proposed double-digit rate increases next year, citing increased costs. Fuhrmann-Simmons' insurer, Community Health Options, is proposing the steepest increase.

Fuhrmann-Simmons and her husband are both self-employed, and the coverage for themselves and one of their daughters increased this year from $11 a month with a $750 deductible per person to $263 a month with a $15,000 deductible for her family. That was after Fuhrmann-Simmons, who receives treatment for multiple sclerosis, switched to a less expensive plan with a higher out-of-pocket deductible, because her original coverage would have cost more than $2,100 per month, she said.

To reduce costs, she has worked with her neurologist to switch medications and has considered forgoing some treatments.

The four carriers — Anthem Health Plans of Maine, Harvard Pilgrim Health Care and United Healthcare Insurance — proposed a weighted average rate increase of 16.8% for plans in the individual market and 15.7% in the small group market, according to Tim Schott, the acting superintendent of the Maine Bureau of Insurance. The maximum proposed increase for next year is 34.8%.

Schott said insurance companies are citing increasing medical costs and more reliance on expensive technologies and specialty medications as reasons for the hike. Payments to medical providers and prescription costs are also higher than projected while insurance companies' overall expenses have increased due to inflation.

But the impact of the expired subsidies is also apparent in the proposed 2027 rate increases "due to expected continued decline in enrollment by healthier and younger members," Schott said in an email. An analysis published last week by Georgetown University said the health insurance market is projected to shrink by 17% to 26% this year, which will also have ongoing implications for 2027 rates.

During President Donald Trump's first term in office, he worked with Congress to effectively eliminate the Affordable Care Act's individual mandate that required everyone, including healthy people, to carry health insurance.

"The millions of people across the country who are likely to drop coverage is impacting the risk pool," said Natasha Murphy, director of health policy at the Center for American Progress, a left-leaning national research and advocacy organization. "Insurers expect the remaining folks to be a little bit sicker and to have higher healthcare needs, and therefore they're trying to account and accommodate for that in their 2027 pricing."

The Maine Bureau of Insurance will review the proposed increases and make a decision in August.

Maine is not the only state facing steep rate increases next year. The Georgetown University report found similar double-digit increases proposed in at least seven other states and Washington D.C.. Along with the expired tax credits, the enactment of Trump's budget last summer caused unprecedented net premium increases and contributed to the largest proposed rate increases in nearly a decade last year, the report found.

"We have already trimmed our coverage down to the bare minimum we can manage and there's not much room left to absorb another hike," Fuhrmann-Simmons said. "If our premium climbs and our deductible climbs with it, something in our life has to give."

Capping hospital prices

One of the ways other states have mitigated cost hikes is capping the amount hospitals can increase prices, said Murphy with Center for American Progress.

In a presentation in February to the Maine Legislature's health committee, the Office of Affordable Healthcare — an independent agency established to study cost-efficient healthcare — said that hospital pricing varies vastly across the state, and sometimes within the same city. For example, in 2023, the cost of a knee replacement was $15,000 higher at Maine Medical Center compared to Northern Light Mercy Hospital, both of which are in Portland.

The office recommended a price cap for Maine hospitals limiting how much provider payments can increase each year.

"Large hospital systems, if they are the dominant entity in a particular area, have outsized market power to essentially force insurers to comply with whatever rate that they're looking for," Murphy said. "And naturally insurers pass those higher prices down onto their enrollees in the forms of higher premiums."

These disputes can lead to a hospital becoming out of network for a certain provider, such as when Northern Light Health and Anthem almost cut ties last year due to a disagreement about reimbursement rates.

A handful of states have implemented hospital payment caps in an effort to try and lower the underlying cost of care. In 2019, Oregon became the first in the nation to pass such a policy, tying hospital prices for the state employee health plan to Medicare rates, which are typically lower than what commercial insurers pay.

A similar proposal was introduced in the Maine Legislature by Maine Rep. Drew Gattine (D-Westbrook), but it was never brought to the floor and died upon adjournment. Analysts said that plan could have saved the state more than $200 million over the next few years.

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Courtesy of Maine Morning Star