LePage Signs Health Insurance Bill as Opponents Consider People's Veto

05/17/2011   Reported By: A.J. Higgins

Gov. Paul LePage was surrounded by fellow Republicans today as he signed a bill that proponents claim will begin to lower the state’s health insurance costs just one year from now. Supporters insist that the bill will encourage competition by broadening the parameters of the state’s so-called “community ratings” system that insurers use to determine the costs of premiums. But Democrats maintain that the cahnges created by the bill will allow insurers to increase costs for people living outside of urban centers and those aged 48 and older.

Gov. LePage acknowledges that LD 1333 isn’t going to accomplish much until about a year from now. But after signing the bill backed by majority Republicans, he says he is convinced that the legislation will prompt insurers to look at Maine differently: “To take a look at 133,000 people and see if we can’t get them insurance,” LePage said.

The 133,000 people LePage is referring to are the estimated number of Mainers who currently do not have health insurance. LePage and others are convinced that LD 1333 will encourage them to get coverage. The health insurance reform bill, which is patterned after similar legislation in Idaho, is designed to broaden Maine’s community ratings system, and allow insurance companies to base their premiums on a new set of criteria.

Specifically, it would allow insurers to focus more on urban areas with larger pools of younger and healthier people, who statistically do not pose the risks associated with older Mainers who tend to populate small rural communities.

The bill also includes provisions that allow Maine businesses and individuals to purchase insurance out of state beginning in 2014. It also sets up a reinsurance pool to cover those with serious illnesses. The pool would be subsidized by a potential $4 per month policyholder tax, and create a fund of $36 million dollars.

If those changes result in lower costs and convince younger people to start buying insurance, LePage says it will be worth it. “The key here is to lower the costs so that young families don’t leave the state, and that they can work here and have health insurance that’s affordable here in Maine–that’s the goal,” LePage said. “And I believe that many other states have done that.”

“Sometimes the hardest thing to do, the hardest thing to do, is to change direction–to realize we’ve been heading in the wrong direction,” said House Speaker Bob Nutting.

Nutting, an Oakland Republican, said that while Democrats had the “best of intentions” in crafting insurance regulations over the past 20 years while controlling both houses of the Legislature, their decisions have resulted in higher insurance costs for Mainers.

While Nutting was applauded by majority Republicans at the signing of LD 1333, he still hadn’t convinced state Sen. Joe Brannigan, a Portland Democrat.

“We’ve done a great deal in protecting people and the environment and they are trying to roll it back in one or two years,” Brannigan says. “I think it’s bad for our state, bad for our people and, hopefully, we’ll be here to pick up the piece when things go bad.”

Brannigan and most other Democrats in the Legislature say the Republican insurance plan was rushed through the committee and legislative process without the scrutiny it deserved–particularly from the state Bureau of Insurance.

Insurance Superintendent Mila Kofman has refused to comment specificially on LD 1333, but announced her resignation after the bill was enacted, and has acknowledged that she and LePage do not share the same philosophy on health care reform.

Democrats say the bill will allow urban Mainers to receive lower rates at the expense of rural residents, whose rates will increase. Senate Minority Leader Barry Hobbins says Democrats are also unhappy with the tax imposed on insured Mainers. “This puts a direct $4 tax, surcharge tax, on every single insured person in the state of Maine,” Hobbins says.

And that’s a charge that members of the Legislature will not have to pay, as Democrats failed in their effort to amend the bill and remove that exemption.

Meanwhile, the Maine People’s Alliance, a progressive advocacy group, the Maine Democratic Party and others are looking into the feasibility of initiating a people’s veto of LD 1333 to prevent it from becoming law 90 days after the Legislature adjourns. Ben Grant, chairman of the Maine Democratic Party, says his office is weighing an organized campaign against the bill.

“I think there’s a good chance there will be a people’s veto on this bill,” Grant says. “You know, we’re going to take a deliberate look at this though–not in the heat of the moment today reacting to the energy around this issue, but we’re going to take a hard look at it. We think it will prove to be very unpopular across Maine.”

Supporters of a people’s veto would have to file their petitions with the state no later than 90 days after the adjournment of the legislative session.