Public Law 90 was enacted to fix a failed health insurance system that had made coverage virtually unaffordable for consumers and left 130,000 Mainers with no coverage. Read More
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Mon, 09/10/2012 - 4:20pm (new)
Posted by thistle
Reposted with permission
Insurance reform leads to real “hope and change” in Maine
By Rep. Les Fossel
What a difference two years make. Here in Maine, we are seeing hopeful signs that things are perking up thanks to reforms enacted by the Legislature. These reforms include tax relief, regulatory fairness, reforms to welfare and public pensions and elimination of fraud and waste at taxpayer-funded agencies.
That makes it all the more puzzling that special interest groups that once ran on “hope and change” now seem oblivious to positive developments that are benefiting Maine families and small businesses. Instead, they are actively seeking to undermine these positive steps because we haven't yet achieved total success, even though these reforms have not even been fully implemented.
Nowhere is this more evident than with Maine's new health insurance statute. Public Law 90 was enacted to fix a failed health insurance system that had made coverage virtually unaffordable for consumers and left 130,000 Mainers with no coverage at all. The private insurance market had entered a death spiral, with higher costs driving out healthier customers, which forced prices even higher for a shrinking pool.
Several publications, including the Press Herald, have been quick to publicize a “study” released by the Consumers for Affordable Health Care (CAHC). It must be noted that CAHC has little to do with “consumers.” It is a well-funded, left-wing lobbying group that has relentlessly fought against free-market insurance reforms and in favor of such schemes as Dirigo Health, a disastrously failed program that cost Mainers some $150 million.
The CAHC report – “Few Winners, Many Losers” – takes good news and turns it on its head. It also fails to mention that PL 90 was designed to move Maine closer to the national mainstream and, ironically, closer to the mandates of the Affordable Care Act (ACA), better known as ObamaCare.
It makes the claim that the new law is creating higher premiums for individual policyholders and small business policyholders. This claim is blatantly misleading because it omits positive news and any comparisons to the failed system PL 90 replaces. Readers should look past the election year rhetoric and consider all the facts.
Their claim that 54 percent of individual policyholders saw higher premiums neglects to add that nearly 100 percent of individual policyholders saw increases in previous years. Nor does the report mention that nearly 87 percent of individual policyholders now have access to lower cost alternatives that meet their needs. As one constituent recently wrote to a legislator, “I'll be going from paying $1,950 a month for a $3,500 deductible plan to $1,063 a month for a $2,000 deductible plan."
The trend lines are clear. Since 1992, Anthem’s individual policy increases have usually ranged over 10 percent, in some years topping 20 percent. For 2012, the average increase is 1.7 percent. Without PL 90 and its guaranteed access pool for those with expensive or chronic conditions, Anthem’s rate would have surged by 22 percent this year, according to Maine’s insurance superintendent.
Similarly, the claim that the “overwhelming majority” of small businesses (90 percent) saw increases fails to point out that approximately 97 percent of small businesses saw increases in recent years. Now rates are falling or moderating. The slowing of annual increases for small groups bears this out. Anthem’s average rate increases for 2009-2011 were 15 percent, 21 percent, and 17 percent. The increase for 2012 was 11 percent.
The report’s description of “worsened product choices” in the individual market is a completely subjective statement that takes individual needs and choice out of the equation. Whether a product is “worse” is depends one’s individual medical needs and risks. Anthem recently announced a new individual product that covers maternity care, combines the medical and pharmacy out-of-pocket limits and is compatible with a tax-free Health Savings Account. This option is a direct result of PL 90.
The alleged higher taxes to “support higher profits” for insurers is really a $4 per policy assessment that lowers individual premiums and is less than the Dirigo Health tax on doctors’ bills, which is being phased out. Total assessments will decline.
Finally, claims of “weakened consumer protections,” based on changes to Maine’s rate review process, fail to mention that PL 90 adopts the standards required under the federal ACA. Insurers now must spend a higher percentage of premiums on medical care, for example.
Early signs show that PL 90 is already making progress despite the fact that one major provision, the ability to purchase health insurance policies across state lines, will not take effect until 2014.
We need steady, forward-looking progress to keep Maine on the path to opportunity and prosperity. Voters should be wary of special interest critics that argue that the world is flat in the face of unbiased statistical evidence that things are improving.
State Rep. Les Fossel (R-Alna) serves on the Judiciary Committee and the Health and Human Services Committee