The state’s health plan would be abolished putting seniors, women and children at risk


May 9, 2011

Republican legislators, by pushing a sweeping rewrite of Maine’s health-insurance laws, could be forcing people off their insurance plans, because those citizens would not be able to afford the increases to their insurance policies.“This bill will lead to a loss of insurance coverage, which means less care and more sick people,” said Dr. DeCarolis, a primary-care doctor from Bethel.Nate Libby, the director of the Maine Small Business Coalition, said that more than 1,476 small-business owners signed a petition in opposition to LD 1333.

“Legislation similar to LD 1333 has failed in other states,” said Libby. “Not long ago, New Hampshire voted to support a similar practice, and within two years they repealed it, because it was hurting so many companies. Small businesses need a plan that allows us to band together to improve our purchasing power, not undermine our bottom lines.”

The 49-page bill, LD 1333, was rammed through the Insurance and Financial Services Committee, not giving members time to read the amended legislation. The process was legal but in violation of joint rules.

Rep. Sharon Treat, who serves as the ranking Democrat on the Insurance Committee, sent a formal request for information and analysis on the proposed legislation to the state’s nonpartisan policy analysis office, asking for time to have the Bureau of Insurance analyze the bill — but her request was not granted.

“Why won’t they [Republicans] let the Bureau of Insurance run the actuaries? — so we can better understand what this plan will do to the state of Maine. People elected us to make smart decisions. We are not taking the time we should be on the major overhaul of Maine’s health care,” said Senator Justin Alfond. “The consequences for people over forty and small businesses in rural Maine could be devastating. LD 1333 is a tax on 600,000 people, in the state of Maine.”

LD 1333 takes people with chronic illnesses and those who are older but not yet eligible for Medicare — especially in rural areas — out of the regular insurance pool and puts them into new Guaranteed Access Plan Associations, where they would most likely face higher deductibles and fewer benefits. The plans will be subsidized by a monthly $4 surcharge — tax — assessed on all other policyholders.

Dirigo Health levied a tax on insurance companies that they could pay with profits they showed from cost-saving measures. While the Dirigo tax raised money to help extend insurance to those who couldn’t afford it, this tax would be used to reduce the burden on insurance companies.All of these protections and many more are in jeopardy with LD 1333:

• According to the Kaiser Family Foundation, Maine has the fourth-lowest rate of uninsured people in the country. Idaho was ranked 29th. Republican lawmakers say all they’re trying to do is adopt a system from Idaho.• Maine has good public health programs, which have reduced smoking, teen pregnancy, and chronic disease.• Maine has pioneered consumer protections that allow students to stay on the family insurance policy, piloted programs to make health care more patient-centered, and launched an innovative voucher program to help small business provide health insurance to their workers.• As a state, we have made the decision that young women who are of child-bearing age should not be penalized with higher health-insurance costs; we have also said that insurance must cover mammography to help catch cancer earlier and save lives, and that insurance should cover treatment of mental illness.

Rep. Sharon Treat, who serves as the ranking Democrat on the Insurance Committee, said any insurance reform should include an insurance exchange.

LD 1333 would move Maine’s community rating from 1.5–1 to 5–1, which would put the state out of compliance with the Affordable Care Act.
Treat said any insurance reform should include an insurance exchange, which creates a marketplace that allows small businesses and individuals to band together to purchase insurance.

“Rather than dovetail reforms in the marketplace with an insurance exchange and the significant premium subsidies available through the federal Affordable Care Act, the rushed Republican plan will hike premiums for many, leading to dropped coverage,” said Treat.

Democratic lawmakers called for further study of the plan and outlined alternatives to the measure, including the creation of a Maine-based insurance exchange that would lower costs for Maine families and small businesses.

The Maine Center for Economic Policy (MECEP) released its analysis of LD 1333, which stated that older Mainers who are privately insured currently pay a maximum of 50 percent more for coverage than people who are younger and healthier.

The pending legislation will allow insurance companies to charge these older Mainers four times more than the minimum rate. The bill allows insurers to use geographic location as a significant and separate factor from age in rate setting, potentially forcing rural residents to seek care farther from home.

“In two years the Affordable Care Act will put back everything this bill gets rid of,” said Kit St. John, director of MECEP. “In the meantime the insurance companies will jump to institute these changes.”

The proposed legislation also allows for purchases of insurance across state lines without ensuring that consumer protections are in place first, and it eliminates the state health plan.

Bill supporters admit that the amended bill was primarily written by insurance companies and the Maine Heritage Policy Center. The MHPC is an ultra-conservative think tank that first became a reality to counter the Dirigo Health Care Act of 2003.

“The Maine Heritage Policy Center has its fingerprints all over this bill. During the committee session, Tarren Bragdon (Director of MHPC) was basically whipping the committee chairs and all the members of the committee. To have a very partisan entity directing elected officials on how to process a bill through the committee is very disturbing,” said Sen. Alfond. “The MHPC has a belief system — that they are using throughout the country as a rubber stamp — which is part of a Republican agenda which favors insurance companies.”

Rep. Henry Beck of Waterville, who offered an amendment on LD 1333 when the House voted on it last week, said, “House Democrats proposed a bold amendment to allow market reforms within federal law. It’s more fair to rural Maine and provides protections for consumers in a reinsurance pool. Importantly, our plans require study and further public hearings on any insurance tax.”