Background Materials                                                                                          

Maine’s Individual Health Insurance Market White paper: Prepared by the Staff of the Maine Bureau of Insurance January 11, 2000 (updated January 22, 2001) Individual health insurance, also called “non-group” health insurance, is generally purchased by those not eligible for employer-sponsored plans. An estimated 38,000 Mainers are covered by individual health insurance. However, the future viability of the individual health insurance market in Maine is uncertain. Rates have risen steeply in the past two years, making coverage unaffordable for many. This not only results in more people becoming uninsured, it also can cause a deterioration of the average health of the remaining pool of risks. This is because those who have health problems and utilize their insurance benefits are much less likely to drop coverage than are healthy individuals. In turn, deterioration of the risk pool could lead to further rate increases, causing more people to drop coverage. If this cycle were to continue, it could lead to a collapse of the individual health insurance market. This phenomenon of a shrinking pool of risks and higher insurance rates is sometimes referred to as a “death spiral.” Read more

Reform Options for Maine’s Individual Health Insurance Market - An Analysis Prepared for the Bureau of Insurance Report: Prepared by Bela Gorman and Don Gorman, Gorman Actuarial, LLC May 30, 2007 In its May 2006 report, the Blue Ribbon Commission on Dirigo Health recommended an analysis of alternative policy initiatives to address the high insurance premium costs for individual health insurance. The Bureau of Insurance engaged Gorman Actuarial and the Muskie School of Public Service to analyze three specific policy options. The first was the merger of the individual and small group markets in which the blended claims experience of these populations would be subject to one set of regulatory requirements. The second policy option was the development of a reinsurance program applicable to all insurers in the individual or merged market in which the claims incurred by high cost persons above a predetermined level, or attachment point, would be borne by a subsidized program. In a reinsurance program, high cost claimants would continue to select and enroll in existing health insurance programs. The last policy approach was the development of a high risk pool in which individuals purchasing insurance in the individual market who are projected to incur high claim costs would be insured in a separate risk pool.  Read more

State Health Insurance Index 2006: A 50-State Comparison of the Nation’s Health Insurance Market Report: Prepared by the Council for Affordable Health Insurance (CAHI) 2006 Surveys of the uninsured consistently show that the cost of health insurance is the primary reason for their being uninsured. Thus, the most efficient way to reduce the number of uninsured Americans is to ensure that people have access to a wide range of affordable health insurance polices. Some states largely achieve that goal, some don’t. This Index identifies those states that are doing the best and worst jobs of ensuring access to affordable coverage. Health insurance may not be cheap in any state, but it can be available and affordable if states implement the right policies. Read more

The Impact of Guaranteed Issue and Community Rating Reforms on Individual Insurance Markets Report: Prepared by Milliman, Inc. for America's Health Insurance Plans (AHIP) August 2007 America's Health Insurance Plans (AHIP) retained Milliman, Inc. (Milliman) to prepare an overview of guaranteed issue community rating reform in eight states in the 1990's, including an examination of their respective states' individual health insurance market. The states include Kentucky, Maine, Massachusetts, New Hampshire, New Jersey, New York, Vermont, and Washington. Read more