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Alexander-Murray bill could help N.H. reinsurance program

  • The State House dome as seen on March 5, 2016. (ELIZABETH FRANTZ / Monitor staff) ELIZABETH FRANTZ



Monitor staff
Friday, October 20, 2017

In September, the Commissioner of the New Hampshire Insurance Department, Roger Sevigny, sent the chairman of the U.S. Senate health committee, Lamar Alexander, a request for action. 

With premiums on New Hampshire’s individual insurance market predicted to rise amid a new swell of patients and rising treatment costs, Sevigny’s department was pursuing what they called a viable solution: a state-wide reinsurance program. 

The idea is simple. The state establishes a fund for health insurers who cover high-risk and high-cost patients, including many of the newly insured Medicaid expansion population. Money in the fund is available to reimburse insurers based on the number of high-cost patients they take – “insurance for insurance companies.”

The savings created, in theory, are then passed on in the form of lowered premiums, potentially stabilizing the insurance markets and keeping residents insured.

But barriers within the Affordable Care Act’s waiver system – made acute by New Hampshire’s relatively unique Medicaid expansion model – have complicated the state’s bid. Writing to Alexander, Sevigny urged an amendment to the waiver requirements to allow New Hampshire to establish the program.

This week, Alexander delivered. Included in the Tennessee Republican’s health care bill are changes to Section 1332, which would allow New Hampshire to use savings from the federal funds it usually receives for tax credits and insurance subsidies to instead be invested into the reinsurance program. 

The bill, co-created with Sen. Patty Murray, D-Wash, has been presented as a bipartisan solution to continue vital subsidies to insurers created under the Affordable Care Act. But in speeches on the Senate floor, Alexander has also touted a new “flexibility” to states, even calling out the Granite State by name. 

“In New Hampshire, for example, the state would like to use Medicaid savings to help pay for the cost of its Affordable Care Act waiver, and this would allow that,” he said Tuesday. 

Now, officials at the New Hampshire Insurance Department say the bill – if it passes – might help pave the way for a state reinsurance program in 2019. 

The new bill, known as Alexander-Murray, allows New Hampshire and other states to use the federal funds it already receives to establish the reinsurance program, on the basis that the money would be accounted for by the savings the program would create. 

Under the system – known as “pass through funding” – the amount of money New Hampshire receives to use toward the program would be determined from the projected savings; theoretically, the overall funds going to the state would stay the same.

In addition to Sevigny’s letter, New Hampshire’s Democratic senators Maggie Hassan and Jeanne Shaheen had pressured Alexander and Murray for months to include the changes in the bill, according to a staffer for Hassan. 

The idea for a reinsurance program has faced a fraught journey since the department first attempted it in 2016. Beyond problems with the Section 1332 waiver process, New Hampshire has also faced a financial hurdle: where to find the “seed money” to get the program going before the federal savings can be reinvested. 

An earlier attempt by the department to get insurance companies in New Hampshire to front the seed money themselves failed a vote in the Joint Health Care Reform Oversight Committee in August.

Gov. Chris Sununu opposed that plan, arguing that charging insurance companies to create the program would only mean the costs would be passed onto consumers.  

But a spokesman for the governor, Ben Vihstadt, said that the governor would support a reinsurance program funded through the waiver changes made by Alexander-Murray.

While the bill appears to have enough support from both parties to pass the Senate, its chance in the U.S. House are murky. 

And Jennifer Patterson, Health Policy Legal Counsel at the Insurance Department, said even with the passage of Alexander-Murray, the establishment of a reinsurance program is still not a guarantee. Among the uncertainties, she said, is whether the state Legislature decides to move Medicaid expansion recipients into a managed care model, as some have discussed – and whether Medicaid expansion is reauthorized at all. 

“There are too many moving parts to say what would happen in New Hampshire,” Patterson said of the bill. “But it’s definitely an effort to help, which is very appreciated.”

(Ethan DeWitt can be reached at edewitt@cmonitor.com, or on Twitter at @edewittNH.)