Rate Justification for Maine Individual Plans

Harvard Pilgrim Health Care
Rate Justification for Maine Individual Plans
Rate Change Effective January 1, 2023

Qualified Health Plan (QHP) issuers are required to post justifications for any QHP rate increases to their websites. Below, please find the justification for the rate increase effective January 1, 2023, for the Harvard Pilgrim Health Care Maine Individual QHP plans.

Drivers of the Rate Increase

  • A key driver of health insurance premium increases year over year is medical trend, which is comprised of inpatient, outpatient, and physician services as well as pharmacy costs. The expected medical cost trend includes increases in the cost of the services provided by hospitals and physician groups and increases in the utilization of these services by our members. Health care costs are impacted by general inflation which is an additional contributing factor to the medical cost trends.
  • HPHC has reflected the anticipated costs of COVID-19 treatment, testing, and vaccines in 2023 pricing as we expect these costs to continue into the future.
  • Maine is moving to a merged individual and small group market effective 1/1/23 to provide greater stability. The impact of this is contributing to higher rate increases in the Individual market.

Under the merged market, rates are determined based on the combined experience of small groups and individuals, and the Maine Guaranteed Access Reinsurance Association program will now apply to small groups as well as individuals. The Maine Bureau of Insurance, under the provisions of Chapter 856, Section 4 determined that the impact of the merged market will result in lower premiums for both small groups and individuals relative to the premiums without merging the markets and without the reinsurance program. However, the 2023 individual premiums under the merged market individual are higher than the current individual rates would have been if the markets were not merged.

Harvard Pilgrim carefully monitors administrative expenses year to year. Administrative costs for Harvard Pilgrim have not increased significantly and therefore do not factor into the overall rate increase for 2023. Under the ACA, at least 80% of premium must be used for medical expenses (otherwise, a rebate is paid to subscribers). After the 2023 rate increase, Harvard Pilgrim expects to comply with this requirement.

Harvard Pilgrim’s Strategy to Keep Premiums Affordable

Harvard Pilgrim is committed to improving value and quality across the health care system. Some of the ways we are working to meet our goals include:

  • Establishing collaborative arrangements with health care providers that control costs and enhance health outcomes
  • Negotiating pharmacy contracts aligning payments with outcomes
  • Managing rare diseases through our nurse care managers
  • Updating our payment policies to deter inappropriate payment for services on selected medical infusible drug claims
  • Maintaining focus on reducing fraud, waste, and abuse

Continuing to find ways to lower health care costs while providing enhanced value to our
customers through our products and services is a keystone to Harvard Pilgrim’s long-term