Health insurance reform law
showing signs of promise
To the editor:
Last session, the legislature worked together, taking bold steps to make Maine a more attractive place to create jobs and opportunity. The primary focus was on changing the culture of state government to make it more supportive of small businesses trying to add workers.
Despite having to deal with a $900 million budget shortfall, we were able to pursue common sense solutions to Maine’s short-term problems, while adopting reforms that will help create a more prosperous future.
Our efforts to transform state government included: regulatory fairness and reform; pension reform; welfare reform; paying outstanding debts (hospitals); elimination of fraud and waste (Maine Turnpike Authority); and a $150 million tax cut (the largest in Maine history) targeted toward job creation. To lower health insurance premiums for individuals, families, and businesses, we also enacted Public Law 90.
PL 90 is a market-based solution designed to ensure that everyone has access to health insurance that is more accessible and affordable. It seeks to fix a dysfunctional private insurance market that makes insurance unaffordable, hinders job creation, and leaves more than 130,000 Mainers without health insurance. Even though the new law has not been fully implemented, the Maine Bureau of Insurance is providing policy makers with initial data and analysis on PL 90’s impact on health insurance rates. So far, the results have been very encouraging, with some consumers seeing rate decreases for the first time in recent memory. Others have seen their rate of increase far lower than has been the case in recent years.
You might say that this debate over the merits of PL 90 is an example of whether or not the glass is half full, or half empty. Discerning readers would do well to look at all the data when assessing the effectiveness of the new law. Prior to PL 90, 100 percent of consumers saw annual premium increases, many in the double digits or higher. What is exciting about PL 90 is that rates are lower for a higher number of consumers and annual increases are less according to data from the Maine Bureau of Insurance.
Because of PL 90, consumers also have access to more choices. In some instances, the availability of new products has meant as much as a 60 percent decrease in premiums. The new law also requires insurance companies to allocate more of their profits to health care claims coverage. It is important to stress that no one loses their current coverage, and cannot be denied coverage due to a pre-existing condition.
Because the new law has not been fully implemented (i.e. consumers cannot purchase insurance across state lines yet), critics are complaining that the benefits are not as great for more rural areas of the state. When PL 90 was passed, legislative leadership pledged to closely monitor its results and make adjustments as necessary. This past spring we amended the law to enhance the benefit to rural areas.
We unanimously passed LD 1670 to combine the rating factor for group size within the rate differential for age. Both Republicans and Democrats agreed on this change. Actuarial projections through the Maine Bureau of Insurance indicate that when LD 1670 fully takes effect (October) it will result in a significant lowering of insurance rates for groups with less than six employees. Also, as younger, healthier consumers purchase health insurance at affordable rates, everyone will benefit.
I believe that with these encouraging results, the law needs time to take full effect so that all of Maine can benefit. The next legislature can build on its success, and focus next on addressing the main driver of health insurance, the cost of delivering health care. This law and the many other reforms passed by the Legislature will help small businesses hire more workers and that will ultimately improve the economy. An improved economy will create more revenue from more taxpayers paying less in taxes because of our tax reforms. That also means more money for cities and towns from revenue sharing as the state budget improves.
I am convinced that the glass is half full and rising. We didn’t get to where we are as a state overnight; it will take a little time to get where we need to go. I am thankful to my constituents for providing me with the opportunity to be part of the change that has taken place in Maine over the past two years.
Senator Roger Sherman
(R-Hodgdon)
