Thursday, December 12, 2013
Let the spinning begin.
Maine residents intending to buy insurance on the new health insurance exchange will find out Wednesday what rates they will pay.
In other states, including California and New York, release of the rates led to furious numbers wars. Liberal and conservative commentators – using the same data sets – simultaneously declared that individual insurance rates would be declining dramatically or spiking upward.
The self-employed or people who otherwise don't have health benefits through an employer will be buying subsidized insurance on the exchange or paying a penalty. Less than 10 percent of people in the entire health insurance market will be buying insurance on the exchange, according to the Maine Bureau of Insurance.
Starting Oct. 1, individuals and small groups can buy health insurance on the exchange for coverage to begin in 2014, a key provision under the Affordable Care Act.
But while partisan battles between Republican Gov. Paul LePage and Democrats in the Legislature were waged over the Affordable Care Act, including an unsuccessful attempt to expand Medicaid, the rates may not create as much of a stir.
That's because in Maine, a health care expert said, it will be nearly impossible to compare the new rates with current rates that people pay on the individual market.
According to preliminary numbers released by the Maine Bureau of Insurance in response to a Freedom of Access Act request by the Portland Press Herald, no plans offered on the exchange appear to be comparable to an existing plan on the individual market, said Joseph Ditre, executive director of Consumers for Affordable Health Care.
Ditre said Maine insurers in recent years have been increasingly offering high-deductible plans on the individual market, to the point that nothing else was available to individuals purchasing insurance. Often, people buying on the individual market were paying $10,000 or more in deductibles.
"All of the plans were high-deductible and the insurers were moving away from comprehensive coverage," Ditre said.
Under the Affordable Care Act, insurers are not permitted to offer such high-deductible plans, so there doesn't appear to be a comparable plan on the exchange, Ditre said. Deductibles at most will be a few thousand dollars, he said.
In an initial rate filing, Anthem Blue Cross Blue Shield referred to its "terminated" current coverage, and showed a zero percent rate increase for the numerous plans that it will be offering on the exchange. That indicates Anthem is working with all new plans and that 2014 will be a base year for rates, Ditre said. The other insurer, Maine Community Health Options, is a new entity, formed with the help of a $62 million federal loan.
According to a preliminary rate filing by Anthem -- which has since been superseded by a filing that wasn't yet public Tuesday -- ratepayers would pay pre-subsidy rates of about $300 to $600 per month, depending on the plan chosen and a number of other factors. But those numbers may not be similar to what individuals will pay on the exchange, state officials cautioned, because Anthem has since revised its rates.
Even in the preliminary rates, there was a wide range of what people would pay, with factors depending on age, location and tobacco use. For comparable plans, older people who smoke and lived in northern Maine would pay hundreds more than a young nonsmoker living in Portland.
For insurance purposes, the state is divided into four regions, resulting in people in the northern reaches of Maine paying more for comparable coverage than southern Maine residents.
Compared with other states, Maine residents currently pay a hefty price for health insurance, in part because insurers don't have as much leverage when negotiating with Maine's consolidated hospital network, said professor Andrew Coburn, a University of Southern Maine associate dean and public health policy researcher.
"It's an uneven playing field. There's not much of an incentive to provide discounts," Coburn said. "Maine is a very different market than New York, Boston or California, where there are a lot of different health care providers."
Since the hospitals know that insurance companies don't have much leverage, that leads to higher negotiated rates for services, which in turn means consumers pay more, Coburn said.
Whether the insurance exchange will in the long term help contain insurance costs remains to be seen, Coburn said. He said he's interested to see what Maine Community Health Options, a community nonprofit co-op, brings to the market as a nontraditional insurance provider.
In 2015, a national plan will be offered on the market, Coburn said, which might help with costs because consumers will have another choice. Also, Harvard Pilgrim insurance officials have said they intend to offer a plan on the exchange in future years.
Dr. Phil Caper of the Maine AllCare group, which advocates for universal health care, said he's skeptical that the Affordable Care Act will control costs.
"The law is unnecessarily complex and there are going to be people gaming the system," Caper said. "There will be a lot of unintended consequences."
He said the law doesn't do anything to control administrative costs, and in some ways the bureaucracy may be more expensive. For instance, the federal government is employing an army of "navigators," people to help individuals purchase insurance on the exchange. And Caper said he's seen attorneys advertise to help people figure out how they can benefit from the ACA.
"This is going to be a bonanza for people helping other people with the ACA," he said.
Joe Lawlor can be contacted at 791-6376 or at: