The second-largest Obamacare insurer in New Hampshire wants to raise rates by 30 percent next year because of problems with the healthcare law.
Minuteman Health told the New Hampshire Union Leader that it is seeking the increases partly because of the federal risk adjustment program and Medicaid.
New Hampshire's Medicaid expansion program calls for most beneficiaries to buy coverage on Obamacare's exchange on the individual market, used by people who don't get insurance through their employer. The state uses Medicaid funds to pay the premiums for Medicaid-eligible enrollees.
The rate hike wouldn't fall on the Medicaid beneficiaries on the exchange since their premiums and deductibles are covered. However, people who are not Medicaid beneficiaries on the exchange would feel the brunt of the proposed hikes, Minuteman CEO Tom Policelli said.
Medicaid expansion beneficiaries typically rack up higher healthcare costs than those on the exchange, which is part of the reason for the proposed hikes.
For instance, Minuteman said, Medicaid expansion customers are at least twice as likely to seek care outside the Minuteman network, where prices are higher.
But the Medicaid expansion claims are only responsible for one-third of the proposed hike. The rest is because of the risk adjustment program, which aims to spread around risk among Obamacare insurers.
The program redistributes funds from plans with lower-risk customers to plans with higher-risk ones. But the formula for risk adjustment has irked insurers and contributed to decisions from several companies to leave or raise prices.
"What's going to drive rates higher is not medical costs. What's going to drive rates higher is unintended results of policy decisions," Policelli told the Union Leader.
New Hampshire's proposed increase, which could change after negotiations with the state's regulator, comes the same day Anthem announced it would pull out of Ohio's exchange in 2018. The insurer giant said part of the reason was Trump administration's reluctance to commit to insurer cost-sharing subsidies in 2018.