Health insurance premiums rise because of Republican insurance deregulation
BY RAMONA DU HOUX
October 17th, 2012
“This law has done more harm than good, and it should be repealed by the next Legislature. The law has proven to be anti-small business, anti-jobs, as well as anti-rural Maine,” said Rep. Sharon Treat, who led the opposition to the bill when it was forced through in a bitter party-line vote in 2011, and she filed a “bill request” to repeal the law.
The report “Few Winners, Many Losers: Evaluating Key Provisions of Maine’s New Health Insurance Law to Date,” released in September by Consumers for Affordable Health Care shows that health insurance premiums have risen for most Maine consumers over the age of 50 and small businesses because of the new Republican health-care law.
CAHC’s findings confirm that the sweeping changes the Legislature made in 2011 to Maine’s fundamental health insurance consumer protection statutes have raised health insurance costs for Maine consumers and small businesses. Meanwhile insurance companies have reaped rewards from the law.
According to the report’s findings, premiums have increased for more than half of Anthem’s Maine customers, including over 90 percent of those between ages 50 and 59, and 100 percent of those age 60 and older. Rates have also increased for more than 90 percent of Maine small businesses. The law was passed with little or no input from Democrats or analysis from the Maine Bureau of Insurance.
“If you are a 55-year-old retiree who no longer has company health insurance and isn’t eligible yet for Medicare, you may be charged 500 percent more than someone in their 20s because of this new law,” said Rep. Adam Goode, who serves on the Insurance and Financial Services Committee. “Younger Mainers may be paying less, but it’s not for quality care. Some policies won’t even cover maternity costs.”
The Republican insurance deregulation, or the “rate hike law,” has had a devastating impact on small businesses and Mainers over age 50, especially in rural areas of the state.
Don Hanson, owner of Green Acres Kennel shop on Union Street in Bangor, said his 20 percent quoted rate hike this year meant that he had to roll back his coverage and triple his deductible.
“Small businesses in Maine are incredibly important to central Maine. They shouldn’t be treated like cash cows for the insurance industry,” said Hanson.
One of Hanson’s employees couldn’t afford the new, higher co-pay and had to cancel her coverage.
“At The Grasshopper Shop in Ellsworth, our premium went from $900 a month to over $1600 month” said Ken Shweikert, commenting on the 78 percent quoted increase for his business. “We canceled the policy. We now have individual policies with $15,000 deductibles.”
When Paul LePage campaigned for governor, he said he would dismantle the Dirigo Health Care Act despite the fact that its programs have saved lives and took the state from 16th healthiest among the states in 2003 to 8th in 2010. This insurance deregulation law saw LePage begin to keep his promise. The dismantling of Dirigo will make it harder for Maine to transition into the health exchanges needed for the implantation of the Affordable Care Act. Dirigo had paved the way.
In October another report from Maine Citizens for Clean Elections reveals that more than one million dollars was spent on campaign contributions from the insurance industry to the campaigns and political action committees of candidates who voted for the bill.
“We’re not saying whether or not this law is good or bad for Maine people — we’ll leave that to others,” said Andrew Bossie, director of MCCE. “But what we are saying is that the voices of Maine people could be drowned out by this money.”
The report also uncovered that the company with the most to gain from the law, Anthem/Wellpoint, dramatically changed its pattern of giving leading up to and after the Republican sweep in the 2010 elections.
“Small business owners are the heart of Maine’s communities and our economy, but this report makes clear that they don’t have the political power of Anthem and the other large insurance companies,” said Maine Small Business Coalition Director Kevin Simowitz. “This is a jobs issue. These rate hikes mean that some employees are laid off and many more aren’t hired.”
For Walter Briggs, who owns a marketing firm in Bath with five employees, a premium hike of 67 percent meant that he had to cut coverage, let one employee go and was prevented from keeping others on full time. Due to his increased deductible, last year his family paid $10,000 in health care costs, in addition to their skyrocketing premiums.
“Briggs Advertising was established in 1987, and for many years we have paid 100 percent of employees’ coverage and 50 percent for their families. Each year, we pay more for less coverage,” said Briggs. “Health care should be a human right.”
The law also created a new $22 million-per-year tax on Mainers with insurance, with the revenue being paid to insurance companies.
The CHAC report was based on insurance company filings with the Maine Bureau of Insurance and found that the health insurance law, PL 90, resulted in the following:
• premiums went up for 54 percent of individual policyholders, and 91 percent for individuals age 55–59, and 100 percent for individuals age 60 and up;
• increases in premiums for 4,706 small businesses, compared to decreases for 532 small businesses;
• higher premiums for 90 percent of small-business policyholders;
• worse product choices in the individual market;
• higher taxes on all insured individuals in Maine;
• weaker consumer protections, to allow insurance companies to hike rates up to 10 percent without requiring prior review.
Successes of the Dirigo Health Care Act of 2003:
• In 2003, Maine ranked 16th healthiest among the states; in 2010 Maine was 8th. In 2003, Maine ranked 19th among the states in covering the uninsured; In 2010 Maine was 6th.
• Maine created an efficient public health system with eight districts that cover the entire state through Healthy Maine Partnerships.
• Maine created ways that enabled its citizens to become healthier — using tobacco settlement funds.
• Dirigo’s insurance carrier cannot deny insurance coverage on the grounds of a patient having a preexisting condition. For preventive care and primary care there are no copayments involved. These provisions have saved lives.
• Dirigo helped more than 34,000 Mainers get health insurance. Dirigo Choice, the health insurance arm of the health-care act, had an enrollment of about 15,000.
• 583 small companies in Maine offered their employees health-care coverage through Dirigo Choice.