January 20, 2013

Health insurance reform faces scrutiny

Critics say the 2011 law hurt small, rural firms; backers counter that it has increased options and cut costs.

By Kelley Bouchard kbouchard@pressherald.com
Staff Writer

(Continued from page 1)

"It's basically subsidizing the insurance companies," said Treat, the insurance committee chairwoman.

Joel Allumbaugh, an insurance broker and a policy director for the Maine Heritage Policy Center, a conservative think tank, challenges many negative conclusions about PL 90, noting that 97 percent of small businesses saw rate increases before the law went into effect.

"We're actually seeing more winners than losers," said Allumbaugh, who also sits on the 11-member board of the Maine Guaranteed Access Reinsurance Association.

In fact, Maine's small group market experienced an average rate increase of 11 percent in 2012, down from an average increase of 17 percent in 2011, according to the Maine Bureau of Insurance.

Drawing a conclusion from that reduction is difficult, however, because average rate increases ranged widely over the last decade or so, from 33 percent in 2001 to 8 percent in 2006 to 21 percent in 2010.

Allumbaugh also disputes concerns about the lack of public oversight of the reinsurance fund, which raises more than $25 million a year by collecting $4 a month from more than 532,000 privately insured Mainers. The money is used to help insurance companies lower premiums for high-cost individual policies.

Treat said she hopes to gather detailed and clarifying data from the insurance bureau and other sources in the coming weeks that will help legislators determine which aspects of PL 90 should be kept and which should be changed. Her committee can expect to hear conflicting testimony.

DIVERGENT EXPERIENCES

For Gary Peachey, the Augusta building contractor, the law has worked well, especially the section that allowed him to join more than 20 other small businesses in forming a health insurance company called MaineSense, administered by Martin's Point Health Care.

Peachey also adopted other newer health insurance options for his 25 employees, including a health savings account and a health reimbursement arrangement. Peachey figures his company's health care costs will drop 10 percent to 20 percent over five years.

That's a positive outlook, considering his rates increased that much each year for the last few years.

"Maine employers are being forced to be innovative," Peachey said. "We've got to keep coming up with new ways to keep health care costs down."

For Ken Simons, the physical therapist, the law has been financially devastating, pushing premiums for himself, his wife and one employee beyond the usual annual increase of 10 percent to 15 percent to about 30 percent in 2012. He's also earning less because of declining reimbursements from his clients' health insurance.

"I'm really getting hit from both sides," Simons said. "To make the bottom line, I've gone from working 50 to 60 hours a week to working 70 to 80 hours a week. In the end, I'm making a buck and a half an hour and I have a doctorate in physical therapy with nearly 25 years of experience."

Staff Writer Kelley Bouchard can be contacted at 791-6328 or at:

kbouchard@pressherald.com

 

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