State's largest risk pool threatens to end coverage if Scanlan's reform becomes law
Mar. 24—The largest risk pool that provides insurance coverage to local and county governments in New Hampshire threatens that it will exit the market entirely should a bill tightening regulations on them becomes law.
Executives with HealthTrust were clearly upset at learning the state Senate had approved an amended version of the reform Secretary of State David Scanlan sought last Thursday on the consent calendar without debate.
A spokesman for HealthTrust said it had received assurances the Senate would publicly debate the matter (SB 297).
The HealthTrust board and officers released a scathing news release late Friday afternoon.
It revealed that a day earlier, its board had voted that if Gov. Kelly Ayotte signed the bill as written, HealthTrust would end all coverages and services Dec. 31 for January groups and June 30, 2026, for groups that have a starting point of July 1, 2026.
"HealthTrust will fulfill all obligations through those dates, in addition to full administration of run-out services. After the full run-out occurs, HealthTrust will distribute remaining surplus funds back to the member groups that we have proudly served," HealthTrust said in its statement.
Scanlan defended the bill and said HealthTrust's statement makes no sense.
"The statement from HealthTrust is irrational. They fail to explain how SB 297 harms their operations on behalf of the political subdivisions in any way. SB 297 adds a measure of accountability in the interest of cities and towns that does not currently exist and will help the financial stability of these organizations," Scanlan said in a statement.
Last month, Scanlan asked that his office be given sweeping new powers to regulate the finances of risk pools after concluding two of the providers were "in danger of insolvency."
Executives with those two risk pools, HealthTrust and the New Hampshire Interlocal Trust (NHIT), said Scanlan's solution would set a minimum floor and maximum cap for how much these firms can hold in reserves that were too low and would be financially irresponsible.
Scanlan: 'They were not following actuarial advice'
In 2010, the Legislature gave Scanlan's office authority to regulate the companies that give local governments a lower-cost option to manage and pay out insurance claims for them rather than a small town or city having to self-fund its own coverage.
"Too often we see government failure when some event occurs that is pretty tragic and people are pointing fingers on who is responsible and how," Scanlan testified.
"Unfortunately, the reason for this bill is two of the risk pools are in danger of insolvency. It's that simple. They were not following actuarial advice."
HealthTrust represents 191 of the state's 234 cities and towns, six of 10 counties, 85 school groups and 74 other units like water, library and fire districts.
HealthTrust insisted its contingency reserve of $35.7 million was more than the thresholds contained in the Senate bill.
It also rebutted the claim from Scanlan's hired actuary that HealthTrust was projected to lose $2.5 million per month.
"This is false. It was then incorrectly stated that HealthTrust was projected to lose $12.5 (million) this fiscal year. This is also false. Our external actuarial projection shows a gain for (Fiscal Year) 2025," HealthTrust said.
In the Senate's only public statement, Senate Finance Committee James Gray, R-Rochester, said his panel unanimously agreed with Scanlan's approach.
"Recent circumstances have caused the secretary of state to be concerned that some risk pools may be in danger of insolvency without the changes identified in this bill, including mandatory minimums and maximums for retention of assets due to unforeseen circumstances," Gray wrote.
HealthTrust also insisted the decision was about the pending bill and not HealthTrust's financial well-being.
"To be clear and to be ahead of mischaracterizations, this decision has nothing to do with HealthTrust's finances. We are viable and would otherwise continue to be. This has everything to do with the extraordinarily flawed SB 297 that has been rushed through the legislative process without reasonable and objective scrutiny," HealthTrust said.
If cities, towns, counties and school districts have to go to the commercial insurance market to provide health care or property coverage, HealthTrust officials insist, their costs would be higher and could lead to local property tax increases.
klandrigan@unionleader.com
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