Health Insurance Marketplace
Federal law currently requires each state to have a website for residents to purchase health insurance online. These online health insurance "marketplaces" or "exchanges" are supposed to be easy, “one stop shopping” for residents who are required to purchase health insurance under the federal Affordable Care Act, which became law in 2010.
How the online marketplace works
Any individual living in New Hampshire can shop for insurance through the health insurance marketplace.
In 2012 New Hampshire passed a law that forbids the state from creating and operating any online health insurance marketplace. This law was intended to stop the Affordable Care Act, or at least save New Hampshire from the costs of creating an online health insurance marketplace.
Because of the 2012 law, the federal government actually operates New Hampshire’s online health insurance marketplace through its Healthcare.gov website. This federal website is funded through a fee levied against premiums for insurance plans bought on the marketplace. However, New Hampshire is still responsible for regulating the insurance plans offered on the marketplace website.
Rules for insurance on the marketplace
The Affordable Care Act has many requirements for insurance plans offered through the online health insurance marketplace.
In particular, insurance plans must cover ten “essential health benefits”:
- Ambulatory patient services
- Emergency services
- Maternity and newborn care
- Rehabilitative and habilitative services and devices
- Prescription drugs
- Mental health and substance use disorder services
- Laboratory services
- Preventive and wellness services and chronic disease management
- Pediatric services, including oral and vision care
New Hampshire also has various regulations for health insurance. For example, New Hampshire rules require insurance networks to include some providers within a certain distance of consumers. Rules also give consumers a right to an external review if an insurer denies a claim.
A lack of choice on the marketplace
When New Hampshire’s online health insurance marketplace launched in 2013, only one insurer — Anthem Blue Cross Blue Shield — offered plans on the website. In addition, Anthem used a limited network of health care providers. Anthem said this narrow network lowered costs and ensured quality. Opponents argued that the narrow network unfairly limited consumer choice.
Since 2013, more insurers have joined New Hampshire’s marketplace, and Anthem has added more providers to its network.
In 2019 there are three insurers offering 17 individual plans on the New Hampshire health insurance marketplace website. All of New Hampshire’s 26 hospitals are included in at least one insurance network.
The New Hampshire Insurance Department studied the network adequacy rules that allowed Anthem Blue Cross Blue Shield to use a narrow network in 2013. Network adequacy rules help define whether an insurer's proposed network of providers can meet the needs of patients across the state. A revised set of rules were issued in 2018.
Financial help for consumers on the marketplace
Individuals who purchase insurance through the online health insurance marketplace may be eligible for financial help from the federal government.
- Consumers at up to 400% of the federal poverty level are eligible for tax credits based on their monthly health insurance premiums.
- Consumers at up to 250% of the federal poverty level may be eligible for additional savings on copyaments and deductibles.
- Consumers at up to 138% of the federal poverty level may have all of their premium costs covered through New Hampshire’s expanded Medicaid program.
Efforts to slow rising premiums
Despite the financial assistance available to consumers purchasing health insurance through the online marketplace, health insurance is still very expensive.
From 2017 to 2018, premiums on New Hampshire’s health insurance marketplace increased over 40%, an increase largely driven by uncertainty over whether the federal goverment would continue programs that have helped insurers cover the cost of newly insured, less healthy, and less wealthy individuals. (The Trump administration eventually decided to end some of those payments.)
The rates actually dropped in 2019, going down by an average of 15%. Analysts said the state's decision to move its expanded Medicaid patients out of the insurance marketplace, instead covering them through standard Medicaid plans, was a likely contributor. Insurers also said rates likely would have declined even further, if not for the decision in Washington to end the mandate for individuals to purcahse insurance or pay a tax penalty.
To help insurers weather uncertainty and pay for the influx of claims from new customers, in 2017 the New Hampshire Insurance Department proposed a reinsurance program. That program would give payouts to insurance companies to cover the costs of unexpectedly high claims. However, the department's application for federal approval of the program was put on hold due to opposition from Gov. Chris Sununu.
Uncertainty at the federal level
While Congress has thus far failed to pass a bill to revise the Affordable Care Act, President Trump has taken action to revise the ACA by executive order. For example, in October 2017, Trump’s administration stopped payments to insurance companies to give discounts to low income individuals (cost sharing reductions). The administration also says it will not enforce the individual mandate to buy health insurance.
In Congress, there have been several proposals to change federal health insurance laws. Among them are moves to:
- Extend premium tax credits to higher income levels
- Charge older individuals more for insurance
- Allow states to set different “essential health benefits” insurers must cover
- Give states block grants to design their own health insurance reforms that would replace Affordable Care Act programs
State legislators do not have control over these federal proposals. If there are major changes at the federal level, New Hampshire legislators will have to choose whether they want to step in and continue to enforce some of the Affordable Care Act’s regulations at the state level or provide funding for plans purchased through the marketplace.
One such change might come through the courts. In December 2017, a federal court in Texas ruled that the Affordable Care Act was unconstitutional because the law did not contain a statement that if one of its provisions was removed, the rest remain valid. One such provision was removed when Congress eliminated the requirement that individuals purchase health insurance or pay a tax penalty. The ACA remains in effect as this case works its way through higher courts.
“NH should continue to have the federal government run the online health insurance exchange/marketplace.”
- It is less financially risky for New Hampshire to have the federal government operate the online health insurance marketplace website. States running their own online health insurance marketplaces have faced ballooning costs and significant technological challenges. The federal government is even seeking money back from some state-run exchanges due to mistakes.
- If New Hampshire takes over the marketplace, it may create a false expectation among users that the marketplace will continue to operate as-is, regardless of changes at the federal level. However, the availability of affordable plans on the marketplace is almost entirely dependent on federal subsidies for consumers and insurers.
- Unlike the federal government, the state government is required to balance the budget every two years, and New Hampshire has a history of cutting social services when the budget gets tight. That arguably makes New Hampshire a riskier funding source for the online health insurance exchange than the federal government.
- According to data gathered the Henry J. Kaiser Family Foundation, the health insurance exchanges in all fifty states saw an average individual premium increase of about 24% in 2017. In contrast, the average employer-sponsored health insurance premium for an individual only increased 4%. Also, only 57% of enrollees on the health insurance exchanges had a choice of three or more insurers, down from 85% in 2016. This shows the marketplaces are failing to lower costs or increase choice, and New Hampshire should therefore stay as uninvolved as possible.
“NH should take over the online health insurance exchange/marketplace.”
- With so much uncertainty about the future of health care reform at the federal level, New Hampshire should take over the online health insurance marketplace to make sure it continues to work for New Hampshire consumers. The marketplace provides insurance for roughly 44,000 New Hampshire residents. If the federal government shuts down the online marketplace, those 44,000 residents will have no way to sign up for coverage.
- A state-run marketplace matches New Hampshire’s tradition of state and local control. If New Hampshire has control over the marketplace, it will have the power to come up with unique, efficient ways increase access to affordable health insurance. The Granite State demonstrated this ability to innovate through its unique Medicaid expansion, which uses private insurance rather than expanding traditional Medicaid rolls. New Hampshire is one of just a handful of states to expand Medicaid with private insurance.
- According to an analysis from Bloomberg, states that run their own health insurance marketplaces tend to have more insurance companies offering consumers more choice on the marketplaces.