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HEALTH CARE REFORM

Small business benefits from Snowe's actions

By Rebekah Metzler rmetzler@mainetoday.com
MaineToday Media State House Writer

U.S. Sen. Olympia Snowe may not have voted for the health care reform law, but she influenced it, particularly in regard to small businesses.

In 2008, Snowe, co-sponsored legislation known as the SHOP Act to let small businesses combine and create purchasing pools to buy health insurance plans by shopping across state lines. That concept is the basis for the insurance exchanges established in the new federal health care law.

“Sen. Snowe’s role on the finance committee was very pivotal, very important,” said Trish Riley, director of the Maine Governor’s Office of Health Policy and Finance. “She’s been very good to work with on those issues. She listens and she makes changes; she works very collaboratively with people. I think it’s fair to say she clearly had her feet on the ground for small businesses and got this done.”

Riley and others have been preparing to implement the new law in Maine. In some ways, the state is positioned for the transition due to existing state insurance mandates and Dirigo Health, which is primed to act as an exchange.

In other instances, officials are waiting for guidance from the federal level before moving forward.

Beginning this year, federal tax credits are available for small businesses offering health insurance.

The U.S. Department of Health and Human Services estimates 22,000 businesses in Maine are potentially eligible for the credit, which is available to small employers with no more than 25 full-time equivalent employees, average wages less than $50,000, and who purchase insurance for their employees.

The health insurance exchanges, which start in 2014, will be clearinghouses for private health insurance plans to compete in the individual and small group markets. The exchanges will likely start in states, but may expand regionally or nationally. Each exchange will be required to offer at least two national plans.

"There’s always a lot of talk in Maine about, ‘if only we could buy health insurance in New Hampshire.’ Well, it’s cheaper because they have different rules and that’s going to go away — everybody has the same rules,” Riley said.

“Each exchange will have two national plans operated like the employee health benefit plan and one will be a nonprofit.”

The national plans will be what members of Congress use for insurance, as mandated in the new law, Riley said.

Individuals purchasing insurance in the exchanges will be eligible for federal subsidies to ensure affordability.

“When we do the numbers, about 500,000 Mainers are eligible for these subsidies,” Riley said. “That’s a lot. They are very deep subsidies and for very low-income people they subsidize both out-of-pocket and premium expenses.”

Eventually, the exchanges will be open to larger businesses with the goal of expanded and reduced cost, according to Riley. “The real difference in Maine will be, when you create a small group market that’s up to 100 employees,that’s virtually all the businesses in Maine,” she said.

Under the law, state are required to have guaranteed issue — meaning  insurers cannot deny coverage to a person seeking it — and community rating, which sets insurance premiums by geography, rather than demographics.

Insurance companies are also banned from placing lifetime limits on policy coverage. Maine has already implemented these policies.