Wednesday, May 25, 2011

Common Sense in Short Supply at Statehouse

There's a lot going on in the Legislature these days but common sense still seems in short supply. 

The health insurance bill I worked hard to defeat, LD 1333, has been signed into law as Public Law 90.  A lot has been said about this misguided policy that was ramrodded through the Legislature, but the bottom line is I believe the law is a giveaway to the insurance industry at the expense of consumers. 

The more I find out about this law, which still has not been analyzed by the Bureau of Insurance actuaries, the more concerned I become.  After the Senate amended the bill, many people thought that some of the major concerns were fixed.  Unfortunately this just isn't true.  I prepared this fact sheet for House members so that they could understand the amended bill. 

No prior rate review.  Just last week the Bureau of Insurance denied Anthem's request to raise rates nearly 10% on average in the individual market.  While the 5.2% allowed is no picnic, the new lawrepeals the authority in the future to review and deny similar rate increases.

An unregulated piggybank for insurance companies. The worst thing about the new law is that it grants the insurance industry taxing authority with little oversight over how much money they raise from policyholders and how that money is used.  The industry-dominated board of the the reinsurance fund (which includes NO consumers) sets the premium tax and decides which policyholders' medical claims will be paid from the fund.  They can literally game the pool in such a way as to get the most money, and then are exempt from prior review of rate increases. If you missed it, here is my commentary published recently in the Kennebec Journal. 

PL 90 makes Maine law inconsistent with the Affordable Care Act (ACA), an interesting situation leading to a decision that legislation LD 1498, to implement the ACA will be carried over to January, while a stakeholder group appointed by the Governor meets to discuss the issues.  Of course the Governor has vowed to repeal the ACA, and legislation is still pending to make implementation of the ACA a felony. Hmmm... I wonder how that will go.  

Common sense has prevailed with respect to some of the most contentious bills this session. We did not repeal the bottle return law, which would have eliminated hundreds of jobs and led to trash on the highways.  We did not repeal our billboard law, which would have hurt tourism and the "Maine brand." We did not eliminate the Board of Environmental Protection or agree to develop 3 million acres of northern Maine. Read the final version of LD 1 which omits most of the original language proposed by the Governor. 

But many proposed rollbacks have gone through or are still pending.  Abolishing LURC is still possible, with the GOP majority of the Ag & Forestry Committee pursuing a 1333-style ramrod approach to policymaking that was so successful before.  The pesticide notification registry is likely gone. The percentage of electricity generated from renewable energy instead of Midwest coal may be reduced. We repealed the state health plan.  The Superintendent of Insurance was essentially prevented from doing her job until she resigned.  And we may yet vote to allow guns in the Statehouse... if the kiddies want to visit, maybe you shouldn't wait until next week!

Monday, May 9, 2011

Whoopie Pie Bill More Carefully Reviewed Than LD 1333 Upending Entire Insurance Market


L.D. 1333 would repeal many of Maine's basic health care consumer protections, allow out-of-state insurers to market policies in Maine without a way to enforce those policies and make sure claims are paid, undermine access to quality affordable health care for older Mainers, rural residents, people with pre-existing conditions and small businesses through significant rate hikes based on where you live or your age. Read this report by the independent Maine Economic Policy Center to find out more.

Rate increases.  LD 1333 promises a lot, but it can't deliver on its promises, and in the process a lot of people, especially in rural Maine, will lose the insurance they have because they simply won't be able to afford the price increases.

It is true that some people will get a price break.  The Bureau of Insurance says LD 1333 will lower the statewide average cost of health insurance by three percent. If you are a young healthy guy in Southern Maine, your rates could go down much more than that.  But if you live in Central, Eastern or Northern Maine - especially if you are middle-aged -your rates could go up a lot. Read the bill. (This is actually the committee amendment which replaced the bill).

Just how much will your insurance go up?  
According to the Maine Bureau of Insurance:
·      14.9% of the Individual Market will see an average rate increase of 29.9%
·      42% will receive premium increases of some amount  
·      Maine people living in the North will experience on average a 19% rate increase
·      Maine people living in Down East will experience a 22% rate increase
·      Maine people who want to keep the insurance policy they currently have will see price increases rise as high as 170 percent over the next 3 years.

Tax increases. These rate increases don't include the cost of the $48 dollar per head annual tax ($292 for a family of four) on anyone who buys health insurance, which will go to insurance companies to help pay for the policies of people who have the most expensive claims.

By the way, these rate hikes are based on the 3:1 ratio between the lowest allowable rate and the highest rate that LD 1333 begins in 2012, not the more drastic 4:1 and 5:1 ratios the bill plans for 2014 and beyond. These higher rates are actually illegal under federal law, as are other provisions of LD 1333.  

Mandates.  Although proponents say LD 1333 keeps all the mandates, such as pregnancy coverage, chiropractic and mental health services, it actually allows businesses to band together and offer insurance that doesn't include the mandates.

Making health care inaccessible.Insurers could make you drive from Fort Kent to Kittery to get your weekly cancer treatments because LD 1333 repeals distance protections. Here is the testimony of Maine Hospitals on an identical provision in another bill.

Gets rid of health planning and costs and quality initiatives. LD 1333 eliminates the Maine health plan and the commission that works to reduce medical costs under the theory that the freed-up marketplace will police itself.

LD 1333 picks winners and losers. 
It lowers rates for some at the expense of many. It pits North against South, the middle-aged against the young. It imposes a new tax on health policies without doing the math about how much money is going to be needed. It will delay access to health care treatment.

I supported an amendment offered by Rep. Henry Beck which fixed the worst problems in the bill and at least moderated the price hikes and required more oversight and justification of the new taxes. Here is a chart comparing the bill and Rep. Beck's amendment. 

Unfortunately this amendment was rejected on a party-line vote and LD 1333 was passed without any support from Democrats.