One of the most pressing issues facing Maine is the high cost of health insurance. A resident of my House district told me that his policy has a $5,000 deductible and he still has to pay more than $10,000 per year for the coverage. That is outrageous. Premiums of $1,000 per month or more for a working family are simply not reasonable. Such staggering amounts leave families unable to meet other financial obligations or even pay for basic necessities. It’s no wonder that Maine people are up in arms. Between our absurd insurance rates and our extreme tax burden, state residents are being squeezed hard. The surging cost of heating oil, gasoline and diesel fuel makes the situation more desperate. Meanwhile, the spiking cost of fuel is driving up inflation on food and every other product that is trucked up here to northern Maine.
The price of fuel is beyond our control, but the Legislature can certainly help control the cost of health insurance. After all, it is the Legislature that created the problem in the first place. If we returned Maine to the American mainstream, our hard-working families and employers would save huge amounts of money.
For several years now, legislators have proposed common-sense reforms to our health insurance debacle. These changes would have dramatically reduced insurance rates by eliminating mandates and bringing more insurance carriers into Maine. None of these changes is radical. They would have created the same kind of system in place in the vast majority of states, where rates for identical policies are half or even one-third of ours. Yet, those content with the status quo in Augusta have refused to accept these cost-saving steps.
Why this seeming indifference to our plight? Basically, people in a position to construct a solution already have their insurance paid for, and therefore the incentive to do something about the problem is greatly diminished. The people at the other end of the power structure don’t care either; they receive free coverage under Medicaid. It is left to the citizens in the middle, the working families and the small businesspeople, to lead a reform crusade.
I believe the only way to solve this problem is with a grass roots effort. We need a Maine Civil Rights Health Insurance movement to force Augusta’s ruling elite to take action. These leaders have made it clear that they intend to stick to our failed policy regardless of the damage to Maine people.
Many people in my district will confide that they have no insurance. They cannot afford it. They also relate horror stories about going to the hospital for relatively minor medical problems and ending up being billed for thousands of dollars. Sometimes the stories are overwhelmingly sad. The amount of money to cover the average family would, in effect, leave them financially devastated.
There are many reasons for Maine’s high rates. It is not because Maine people are older or unhealthier. It is because of our state government and its policies and regulations. Consider the following:
Mandates: In Maine you can purchase a “Cadillac” insurance policy, and that’s it. You are covered for (even if you don’t want to be) psychological counseling, alcoholism rehabilitation, drug rehabilitation, AIDS and much more. These benefits are great, if you want them and can afford them. Many young Maine families would rather have a “Chevy” policy that would cover them in the event of a catastrophe and that they could afford, rather than a Cadillac policy that they can’t.
Community Rating: Maine’s “Community Rating” law requires all premiums to vary only a small amount, regardless of the policyholder’s age, health or habits. It sounds great on paper. In reality, the system subsidizes the older, less healthy yet often wealthier people with the artificially high premiums imposed on the younger and healthier. Healthy young people and families drop out of the market because they can’t afford the high premiums. The result is called adverse selection – more unhealthy people concentrated in Maine’s insurance pool, resulting in higher rates on those who remain. The cycle continues until we find Maine in what is known as a health insurance “death spiral.”
Dirigo: Dirigo survives by taxing health insurers (the so-called savings offset payment), who then pass the tax on to you and me. This is not making health insurance cheaper except for those lucky few who get the Dirigo subsidy, paid for by the rest of us. The worst thing about Dirigo is that it has blocked genuine insurance market reforms.
Medicaid: Maine’s Medicaid enrollment of 270,000 is now about 20 percent of our population. This huge percentage – the highest in the country – combined with the low level of reimbursement by the state to health care providers, is taking its toll. The total now owed to Maine’s hospitals because of Maine’s irresponsible Medicaid expansions is around $280 million. This shortfall has to be covered by the rest of us through higher health care costs and higher taxes.
The Anthem Monopoly: Anthem Blue Cross and Blue Shield has a virtual monopoly on Maine’s individual health insurance market. State government restricts our insurance industry with such a heavy hand that only the strongest can survive. We used to have more than a dozen large players in our health insurance market. Now we have essentially one. Several national companies have expressed interest in returning to the Maine market, but only after Maine changes its restrictive policies. Bringing competition to our state would stabilize our individual market and help reduce premiums.
To repeat, legislation to fix all of these problems has been offered time and again. Unfortunately for all of us, it is always squelched. The partisan roadblocks to affordable health insurance in Maine must be removed. With common sense in the driver’s seat, we can all be winners.
The price of fuel is beyond our control, but the Legislature can certainly help control the cost of health insurance. After all, it is the Legislature that created the problem in the first place. If we returned Maine to the American mainstream, our hard-working families and employers would save huge amounts of money.
For several years now, legislators have proposed common-sense reforms to our health insurance debacle. These changes would have dramatically reduced insurance rates by eliminating mandates and bringing more insurance carriers into Maine. None of these changes is radical. They would have created the same kind of system in place in the vast majority of states, where rates for identical policies are half or even one-third of ours. Yet, those content with the status quo in Augusta have refused to accept these cost-saving steps.
Why this seeming indifference to our plight? Basically, people in a position to construct a solution already have their insurance paid for, and therefore the incentive to do something about the problem is greatly diminished. The people at the other end of the power structure don’t care either; they receive free coverage under Medicaid. It is left to the citizens in the middle, the working families and the small businesspeople, to lead a reform crusade.
I believe the only way to solve this problem is with a grass roots effort. We need a Maine Civil Rights Health Insurance movement to force Augusta’s ruling elite to take action. These leaders have made it clear that they intend to stick to our failed policy regardless of the damage to Maine people.
Many people in my district will confide that they have no insurance. They cannot afford it. They also relate horror stories about going to the hospital for relatively minor medical problems and ending up being billed for thousands of dollars. Sometimes the stories are overwhelmingly sad. The amount of money to cover the average family would, in effect, leave them financially devastated.
There are many reasons for Maine’s high rates. It is not because Maine people are older or unhealthier. It is because of our state government and its policies and regulations. Consider the following:
Mandates: In Maine you can purchase a “Cadillac” insurance policy, and that’s it. You are covered for (even if you don’t want to be) psychological counseling, alcoholism rehabilitation, drug rehabilitation, AIDS and much more. These benefits are great, if you want them and can afford them. Many young Maine families would rather have a “Chevy” policy that would cover them in the event of a catastrophe and that they could afford, rather than a Cadillac policy that they can’t.
Community Rating: Maine’s “Community Rating” law requires all premiums to vary only a small amount, regardless of the policyholder’s age, health or habits. It sounds great on paper. In reality, the system subsidizes the older, less healthy yet often wealthier people with the artificially high premiums imposed on the younger and healthier. Healthy young people and families drop out of the market because they can’t afford the high premiums. The result is called adverse selection – more unhealthy people concentrated in Maine’s insurance pool, resulting in higher rates on those who remain. The cycle continues until we find Maine in what is known as a health insurance “death spiral.”
Dirigo: Dirigo survives by taxing health insurers (the so-called savings offset payment), who then pass the tax on to you and me. This is not making health insurance cheaper except for those lucky few who get the Dirigo subsidy, paid for by the rest of us. The worst thing about Dirigo is that it has blocked genuine insurance market reforms.
Medicaid: Maine’s Medicaid enrollment of 270,000 is now about 20 percent of our population. This huge percentage – the highest in the country – combined with the low level of reimbursement by the state to health care providers, is taking its toll. The total now owed to Maine’s hospitals because of Maine’s irresponsible Medicaid expansions is around $280 million. This shortfall has to be covered by the rest of us through higher health care costs and higher taxes.
The Anthem Monopoly: Anthem Blue Cross and Blue Shield has a virtual monopoly on Maine’s individual health insurance market. State government restricts our insurance industry with such a heavy hand that only the strongest can survive. We used to have more than a dozen large players in our health insurance market. Now we have essentially one. Several national companies have expressed interest in returning to the Maine market, but only after Maine changes its restrictive policies. Bringing competition to our state would stabilize our individual market and help reduce premiums.
To repeat, legislation to fix all of these problems has been offered time and again. Unfortunately for all of us, it is always squelched. The partisan roadblocks to affordable health insurance in Maine must be removed. With common sense in the driver’s seat, we can all be winners.
