May 6, 2013

MAINE COMPASS: Eroding health insurance reforms would be costly, unproductive

Sen. Rod Whittemore

I said at the beginning of this session that one of my top priorities would be protecting Public Law 90, the sweeping health insurance reforms that were passed by the Maine Legislature in 2011.

The new law was designed to make health insurance more affordable to Mainers by introducing more competition to the market. In the short time it has been in effect, it has exceeded expectations by either reducing insurance premiums or drastically dropping the annual rate increases that we've grown accustomed to here in Maine. PL 90 has also had the added positive effect of bringing more young people -- a group that traditionally represents the highest number of Maine's uninsured -- into the health insurance market. Adding this demographic to the insurance pool will be a major factor in lowering insurance costs for all age groups, not just the young.

I also predicted the new Democratic majority now in power in Augusta would attempt to chip away at the new law, in an effort to move Maine toward a more centralized, government-run health insurance model. Several bills now before the 126th Legislature would do that.

One bill in particular, L.D. 546, targets the Maine Guaranteed Access Reinsurance Association, which was created by PL 90. MGARA is a nonprofit reinsurance company that is intended to cover the costs of catastrophic insurance claims and high-risk individuals. It is funded by an assessment of up to $4 per month on policyholders' premiums and reinsurance premiums charged to insurers.

L.D. 546 would suspend MGARA until the year 2016. I actually am in favor of doing this because the federal Affordable Care Act, which goes into effect fully in 2014, includes a similar charge on premiums that will be in place until 2016. Leaving both the MGARA and the federal assessment on the books would have the effect of double-billing Mainers.

The federal assessment will be more expensive at $5.25 per individual. Another key difference is that the money collected for this assessment will be sent to Washington, where it will be managed by the federal government, whereas the fee collected under PL 90 stays in Maine and is managed by MGARA.

Gov. Paul LePage requested a waiver from the federal government that would have allowed Maine to keep the MGARA assessment and be exempted from the federal fee; the Obama administration, however, denied that request.

Other parts of the bill are more troubling. A traditional board of directors currently has oversight of MGARA. The proposed legislation would reduce the number of board members from the insurance industry from five to three and add two members from consumer groups. They likely would be from organizations such as the Maine People's Alliance, which is committed to a single-payer, government-run health care system.

I believe that requiring such representation on the board of a private insurance company such as MGARA is nothing more than a thinly veiled attempt to reverse the progress of PL 90.

The bill also would subject the privately run MGARA to Maine's Freedom of Access Act, requiring it to spend time and money producing documents for any individual or organization that requests them. I don't know what the real intent is of adding this new requirement to MGARA.

The Maine Legislature's Democratic leadership has indicated it does not want to overturn Maine's new health insurance law. This is commendable, because the evidence that it is working is indisputable. Any changes this Legislature makes to the law must focus on strengthening it to make health insurance more accessible and affordable to all Mainers.

Sen. Rod Whittemore, R-Skowhegan, serves on the Maine Legislature's Insurance and Financial Services Committee.

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