The state will merge the Affordable Care Act insurance markets for individuals and small groups to create more stable pricing for health coverage, particularly needed among the declining group market used by small businesses.

Maine will be first in the nation to combine the two markets into a subsidized reinsurance program, officials said. The merger was authorized by the Made for Maine Health Coverage Act, signed into law by Gov. Janet Mills in 2020.

The Maine Bureau of Insurance said the market for individual health insurance has been stable, but premiums for small group insurance have been rising and enrollments have been declining. Putting the two groups together will promote more stability, the bureau said.

The decision to merge the two markets, which will take effect in 2023, is intended to help small businesses, a key goal of Mills’ administration, Maine Insurance Superintendent Eric Cioppa said. Due in part to tax subsidies provided by the Affordable Care Act, the number of individual insurance policies has been increasing, he said, while policies issued for small groups, such as employees of small businesses, have been declining.

Maine had about 48,300 people insured in the small group market as of last March and about 63,000 in the individual market, the bureau said.

The merger will pool the risks of the two markets and also put the small group market into the Maine Guaranteed Access Reinsurance Association, or MGARA, a state-created body that helps provide reinsurance, a way to share the risks of large insurance claims. MGARA was initially launched in 2012, but was suspended in 2014 and then relaunched in 2019.


The bureau said the individual and small group markets have been shifting since 2019 with the revival of MGARA for individual policies and the expansion of MaineCare, which provides free or low-cost health insurance for low-income individuals. The small group market has been experiencing declining membership and rising premiums – average rate increases were 31 percent over the period from 2019 to 2022.

Meanwhile, premiums for the individual market declined by 14 percent over the same four-year period, the bureau said.

Cioppa said the bureau projects that pooling the market will result in average premium reductions of 8 percent for individuals and about 6 percent for small employers in 2023. Premiums are projected to decline another 6.1 percent for individuals and 3.9 percent for small employers in 2024, he said.

Cioppa said the state has applied for approval of the plan with the federal government. Although approval hasn’t yet been granted, he said discussions with federal regulators have led him to believe it will be forthcoming.

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