2019 Rate Justification NH

Harvard Pilgrim Health Care

Rate Justification for New Hampshire Individual Plans
Rate Decrease Effective January 1, 2019

Qualified Health Plan (QHP) issuers are required to post justifications for any QHP rate changes to their websites.  Below, please find the justification for the rate decrease effective January 1, 2019 for the Harvard Pilgrim New Hampshire Individual QHP plans.

Drivers of the rate change

The average 2019 rate decrease for Harvard Pilgrim renewing members is 14.1%.

  • 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. Any expected medical cost trend increases include 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.
  • The size of the Individual market is expected to continue to decline as the uncertainty around provisions of the ACA and in particular the enforcement of individual mandate impact purchasing decisions. It is anticipated that continued non-enforcement of the individual mandate will result in younger, healthier members being the first to leave the market which will result in a more expensive risk pool in 2019.
  • The State of New Hampshire has been using Medicaid funds to purchase QHPs in the exchange for Medicaid expansion enrollees, via the state’s Premium Assistance Program (PAP). However, New Hampshire recently enacted legislation for 2019 that directs the state to seek federal approval to abandon the PAP system and switch to regular Medicaid managed care instead. There is a correlation between lower income and poorer health, so with the Medicaid expansion population moved out of the QHP risk pool, the overall health of the pool will improve. This reduced morbidity will translate into lower premiums for everyone who remains in the QHP pool. The impact more than offsets the trend and morbidity described above.

Harvard Pilgrim carefully monitors administrative expenses year to year.  Administrative costs for Harvard Pilgrim have not increased significantly. Under the Affordable Care Act, at least 80% of premium must be used for medical expenses (otherwise, a rebate is paid to subscribers).  After the 2019 rate decrease, 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 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 strategy.