(The Center Square) – The federal government has approved Maine’s request for a waiver to merge its individual and group corporate health plans to help reduce rising premium costs.
The U.S. Centers for Medicare and Medicaid Services announced Friday that it has approved Maine’s “nation-first” plan to improve health insurance for small businesses by merging the two insurance markets into a single pool at from next year.
Democratic Governor Janet Mills praised the Biden administration for approving the waiver and said the merger plan “will stabilize the health insurance market and reduce health insurance costs for small businesses.”
“Small businesses are the backbone of Maine’s economy, providing jobs and crucial benefits like health insurance to tens of thousands of Maine residents,” Mills said in a statement. “Ensuring that health insurance remains affordable, not only for the health of small businesses, but also for the health of their employees, is critical.”
Under the plan, Maine will merge its individual and small group health markets into a single common market, starting in 2023. The Mills administration said the merger will “stabilize the market” and enable federal funding through the Maine Guaranteed Access Reinsurance Association to be extended to the small group market.
Reinsurance provides a “direct benefit” to consumers by paying a portion of provider claims that would otherwise be paid by consumers through higher premiums, state officials said.
The Mills administration said while health premiums are expected to rise next year, the federal waiver and state merger plan will reduce those costs for consumers.
State officials cited the example of a 40-year-old man with an individual health plan whose monthly premium would increase by $64.35 with the waiver. Without the waiver, that person would have paid $99.31 more per month, they said.
Meanwhile, a 40-year-old man with a small group plan who would have paid $44.02 more each month would only see an increase of $15.92 per month with the waiver, officials said.
“Federal approval of Maine’s innovative plan to improve health coverage is good news for Maine consumers and small businesses,” said Ann Woloson, executive director of the nonprofit Consumers for Affordable Health Care. . “It will be easier and more affordable for Maine residents to get the health coverage they need by keeping costs down using tools that are already proven in our state.”