Maine Legislative Democrats: Reckless insurance law bad for Maine
AUGUSTA – Maine Senate and House Democrats warned that an insurance-industry backed measure signed into law today to overhaul Maine’s health insurance protections will drive up costs for the sickest Maine people, those living in rural areas, and anyone over age 48. The Republican plan, LD 1333, was ramrodded through the legislature and passed largely along party lines, despite protests from doctors, consumer advocates, patients, and small businesses.
“The law takes Maine in the wrong direction,” said Rep. Emily Cain of Orono, the House Democratic leader. “Instead of increasing access to quality care for all Maine people, all of the evidence suggests this plan will only increase costs.”The overhaul will allow insurance companies to charge Mainers three times more than their neighbor for insurance based on their age alone – and an additional amount depending on where they live. The bill has no limit on the additional percentage a Maine could be charged based on what kind of job they have. “We all agree something must be done to make health care more affordable to Maine people and businesses,” said Senate Democratic Leader Barry Hobbins of Saco. “But there was no reason for this to have been rushed through without a comprehensive actuarial analysis by the Bureau of Insurance and having the proposal recommitted for further review by the Insurance and Financial Services Committee.”
The new measure also repeals a law that prevented insurance companies from forcing Maine people to travel far distances to receive cheaper care.
According to the Bureau of Insurance analysis of a similar but less drastic plan, the law will cause health insurance rates in rural Maine to go up on average by 20 percent. Maine people living in the North will experience an average rate increase of 19 percent. Maine people living in Down East will experience an average rate increase of 22 percent.
“This is tantamount to a sell out of Maine people to big insurance,” said Rep. Sharon Treat of Hallowell, the ranking House Democrat on the Insurance and Financial Services Committee. “There are very few checks and balances over how much money they collect and what they spend it on. What’s to prevent insurance companies from making the reinsurance pool their own piggy bank?”
The bill creates a pool run almost completely by insurance companies and business interests that will be paid for with a per-person tax on everyone’s insurance policies. The $25-40 million fund is paid for by a monthly tax of up to $6 a month or $72 per year on top of an individual’s premium. A family of four would pay an extra $288 per year.
The law exempts lawmakers and state employees from the tax.
“Today the Governor signed a $36 million tax on the people of Maine,” said Senator Justin Alfond of Portland, the Assistant Senate Democratic leader. “The Republicans claim this bill will cover all of Maine’s 133,000 uninsured and will lower premiums for all Mainers. The bar for success has been set and Maine people will be able to measure it.”
The law also poses conflict with federal law and could see legal challenges if not fixed.
“Within hours of the Governor signing the law, we are already learning of more conflicts with the federal law,” Treat added.
The Insurance and Financial Services Committee today discovered that LD 1333 eliminates the upfront review of rate increases that protect consumers from rate hikes.
The law was crafted based on the system in Idaho, where the rate of uninsured is higher than in Maine. Maine has one of the lowest rates of uninsured in the country.
“There is no other way to say it: buyers beware,” said Senator Joe Brannigan of Portland, the lead Senate Democrat on Insurance and Financial Services. “If you’re over 48 and live outside of Portland, start putting money aside so you can pay your insurance tax and increased premium.”
