Minuteman Health seeks up to 45% NH rate hike for 2017

Company blames risk adjustment rules for big increase for individuals

Minuteman Health, one of the larger insurers in New Hampshire that offer coverage to individuals under the Affordable Care Act, announced Monday that it could raise its rates by more than 45 percent in 2017.

But the company, which doubled its covered population to over 16,000 in 2016, said the increase could change depending on how the federal government interprets an obscure rule known as risk adjustment.

Minuteman’s rates, a monthly average of $273.70 in 2016, would jump up to $397.39 for individuals next year under the preliminary filing.

Its proposed group rate increase – 1.5 percent, to $344.81 a month – is a lot smaller.

Minuteman’s share of the individual insurance market is now at 17 percent, the same as Harvard Pilgrim Health Care and about half the share of Anthem Blue Cross and Blue Shield. It also is not too far behind that of NH Healthy Families, the latter’s membership being nearly all new Medicaid recipients, which it covered in 2015 under the Medicaid managed care program.

Indeed, the impact of expanded Medicaid in 2017 was one of the reasons behind the proposed increase, according to Minuteman. Minuteman said it hasn’t had time to assess the impact of this group, which became part of the ACA private exchange pool for the first time, and now constitute nearly a fifth of Minuteman’s membership.

But the insurer‘s the main concern is risk adjustment, a formula that the federal government uses to figure out how much insurers with healthier populations should pay insurers of those with more health care needs.

Minuteman contends that the formula penalizes new and rapidly growing insurers that are not yet able to document the risk of new enrollees. So it is joining with other Consumer Oriented and Operated Plans, or CO-OPs, to push the federal government to change the formula.

So until Minuteman receives its risk adjustment bill in June, the insurer is preparing for the worst.

“What is perfectly clear is that the federal risk adjustment formula will be the determining factor in the final rates,” said Scott Colby, Minuteman’s senior vice president of sales and executive director. “As it is written now, risk adjustment punishes high-growth plans with efficient provider networks by forcing them to pay onerous sums to insurers that are slower-growth and have wide-open networks with more expensive providers.”

Minuteman stressed that its operating results are positive and its balance sheet is strong.