Analysis: 25,000 NH residents to pay much more for insurance

CONCORD, N.H. (AP) - About 25,000 New Hampshire residents will pay an average of 52 percent more for their health insurance next year, an analyst hired by the state insurance department told lawmakers on Wednesday.

Bela Gorman of Gorman Actuarial, a health insurance consulting firm, presented her findings to a legislative committee studying the future of New Hampshire’s expanded Medicaid program, which uses federal money to put about 43,000 low-income people on private insurance under former President Barack Obama’s health care law. She said among 97,000 people in the individual insurance market, the 74 percent who either get federal subsidies or are part of the expanded Medicaid program will likely see their premiums drop or remain flat in 2018. But the 26 percent who pay the full cost will see sharp increases.

Turmoil in Washington over the fate of the health care law has led many insurers to propose higher premiums across the country, and in New Hampshire, one company recently withdrew from the market and another decreased its offerings.

“We’re almost getting a double whammy in terms of the increase,” Gorman said.

The consultant said the premium hikes, Minuteman Health’s departure and weak enforcement of the health law’s coverage mandate could prompt between 5,300 and 13,200 people to drop coverage by the end of 2018, which would further drive up premiums for those left in the individual market.

“That’s a classic example of a death spiral, where high premium increases are being delivered, and healthy people start to exit the market, and then what’s left is the higher risk (customers). And then higher premium rates are set because now you’re left with higher risk, and it just continues,” she said.

In a report released last month, Gorman said health care costs for Medicaid recipients were 39 percent higher than costs for others in the individual market after adjusting for age and other factors, and if the program didn’t exist total claim costs in the individual market would be 14 percent lower. But an insurance department official noted that if higher premiums drive healthy people to drop insurance it’s possible the Medicaid recipients could act as a sort of ballast for the individual market because their participation doesn’t depend on price.

Gorman said moving more people classified as “medically frail” out of the individual market could help, but it would take more than that to solve the problem.

“You’re going to have to employ many tools,” she said.

Greg Moore, state director for Americans for Prosperity, said the consultant’s estimates illustrate the impact of “two terrible policy decisions” - passage of the health care overhaul law and the state’s decision to expand Medicaid.

“The crushing hand of ObamaCare is about to come crashing down on tens of thousands of New Hampshire citizens who will have to choose between a 52% rate increase to keep their health insurance or moving to the ranks of uninsured through no fault of their own,” he said in a written statement. “It’s time our elected officials work on real solutions that provide more choice, more flexibility and actual affordable coverage.”