Rate Justification for Maine Individual Plans

Harvard Pilgrim Health Care
Rate Justification for Maine Individual Plans
Rate Change Effective January 1, 2024

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, 2024, for the Harvard Pilgrim Health Care Maine Individual QHP plans.

Drivers of the rate increase

  • Trend: A key driver of year-over-year health insurance premium increases is medical trend, which is comprised of inpatient, outpatient, and physician services as well as pharmacy costs. Medical trend includes both increases in the cost of the services provided by hospitals and physician groups and increases in the utilization of these services by our members. In particular, for 2024, Harvard Pilgrim expects upward pressure on medical unit cost increases, driven primarily by the higher inflationary environment. While Harvard Pilgrim expects to successfully manage these unit cost increases, they are expected to be above recent levels. Additionally, pharmacy trends continue to put upward pressure on overall claim trend, and this is expected to continue in 2024.
  • Reinsurance: The MGARA reinsurance program has updated reimbursement parameters for 2024 which will reduce the reimbursements for carriers participating in the merged market. The impact of the changes is contributing to the increase in rates for 2024. The MGARA reinsurance program has helped to lower premiums in the Individual market prior to 2023 and in the merged market starting in 2023. The program still reduces premiums in 2024, but to a lesser degree.

Rate changes vary by plan and by account based on age composition and rating area.

Under the ACA, 80% of premium must be used for medical expenses, otherwise a rebate is paid to subscribers. This rate increase is calculated to comply with this requirement.

Harvard Pilgrim’s strategy to keep premiums affordable

Harvard Pilgrim is committed to improving quality and delivering increased value across the health care system. Today, we are focused in the following areas to support these strategic objectives:

  • Establishing collaborative arrangements with health care providers to control costs and improve health outcomes
  • Negotiating pharmacy contracts aligning payments with outcomes
  • Managing chronic conditions and 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

We remain committed to identifying opportunities to lower health care costs while providing enhanced value to our customers and health plan members today, and in the future.