Health insurance premiums in New Hampshire increased relatively little for small and large businesses in 2014, while rates in the individual market went up significantly more, according to state-hired consultants.
New Hampshire state law requires the Insurance Department to hold an annual hearing on health insurance costs. At a Nov. 6 hearing, consultants who analyzed the latest data said average premiums in the small group market increased 1.4 percent from 2013 to 2014. For large groups, the increase was 3.8 percent, and in the individual market, the increase was 23.6 percent.
Most of that increase is attributed to the influx of older, sicker consumers getting coverage under the Affordable Care Act, said Jenn Smagula of Gorman Actuarial, Inc. But the increase doesn’t take into account that many individuals receive subsidies that make coverage more affordable, she said.
The analysis also showed some shifts within different segments of the market, she said. In December 2013, individuals made up 16 of the total fully-insured market, but grew to 27 percent by April 2015. At the same time, the small group market decreased from 38 percent of the total to 32 percent. Both shifts reflect sole proprietors moving from the small group to the individual market under the Affordable Care Act, she said.
In both the small and large group markets, consultants say there has been a shift toward plans that have lower premiums but higher deductibles. For example, in 2012, 48 percent of companies in the small group market had plans with average deductibles higher than $3,000. By 2014, that percentage was 68 percent.
Smagula also discussed several ways insurance companies have tweaked their offerings in an attempt to keep premium increases under control. Those include creating limited health care provider networks — hospitals agree to lower reimbursement rates in exchange for the potential for more business — and plans that give consumers an incentive to choose lower-cost options. For example, having a colonoscopy at an ambulatory surgical center instead of a hospital.
“While we have seen relatively low premium increases in New Hampshire, affordability of health insurance is still a concern. Carriers and employers in New Hampshire are continuing to explore different options to impact premiums through product design,” she said.
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