Lisa Burton, who owns Reel Pizza Cinerama in Bar Harbor with her husband, saw her health insurance rate jump 67 percent this year. That’s on top of a 35 percent increase last year. In two years, premiums to cover her three full-time employees have doubled.

“I feel lucky that business is doing well enough that I can absorb it,” she said. “Other small businesses aren’t that lucky.”

Additional Photos

Bill Kelton, president of Maine Parts & Machine in Portland, says it has cost him 18 percent more this year to provide health insurance to his 36 employees. Photos by Gordon Chibroski/Staff Photographer

Gilbert Buthlay, chief executive officer of BEK Inc., saw his premiums rise this year, too, but by only 3 percent for the 13 workers at his computer network design and service company in Brunswick. In previous years the increases had been around 10 or 15 percent, he said. Gordon Chibroski, Staff Photogra

Gilbert Buthlay, chief executive officer of BEK Inc., a computer network design and service company in Brunswick, saw his insurance premiums rise this year, too, but by only 3 percent for his 13 workers.

“Because of the makeup of our work force, we were able to take advantage of another option that costs less but is a better fit,” Buthlay said. “Our increases had been 10 or 15 percent, so we’ll take 3 percent. And my employees are happy.”

The experiences of those two small businesses show how the state’s health insurance reform law has created both winners and losers since it was passed last year.

Supporters say the law is doing what was intended by lowering premiums for some Mainers and small businesses — mostly companies in southern Maine with younger, healthier employees — through deregulation and increased market competition.

Critics counter that while insurance rates have decreased for some, they have jumped substantially for older Mainers and small businesses in rural Maine.

Both sides are using the same data to make their case. The issue recently has become a pre-election wedge issue for Republicans, who backed the reform package and want to retain their majority in the Legislature, and Democrats, who opposed the law and want to take back control of the House and Senate.

Maine Insurance Superintendent Eric Cioppa said the most accurate characterization of the law’s impact to date is “incomplete.”

“It’s a step in the right direction, but the real issue is the cost of health care,” he said. “Until those costs are reined in, insurance rates as a whole are not going to come down.”

Public Law 90, which passed in May 2011 and took effect in October, did three things:

• Gave providers more authority to vary premiums for different age groups.

• Eliminated the need for state approval of rate increases of less than 10 percent.

• Created a “reinsurance” fund to help consumers pay costly medical bills. That program is funded by a $4 tax on nearly all policies sold in Maine.

In the months that have passed, some patterns have emerged. Consumers for Affordable Health Care, an Augusta-based advocacy group, released a report this month highlighting those patterns and criticizing the law’s impact to date.

All individual policy holders younger than 40 have seen a rate cut, while most Mainers older than 55 saw premiums increase. The report also says 90 percent of businesses have seen increases since the law passed, while 10 percent have seen decreases.

Democrats seized on those numbers to back their argument that the law has been a disaster.

“A lot of concerns that were just dismissed when the bill was discussed have proven true,” said Rep. Sharon Treat, D-Hallowell, lead Democrat on the Legislature’s Insurance and Financial Services Committee.

Rep. Jonathan McKane, R-Newcastle, another member of the insurance committee, said Democrats and consumer advocates are cherry-picking numbers.

“They are taking bad cases and waving them high on a petard,” he said. “We never said it was going to turn around the market overnight.”

McKane noted that insurance premiums had been increasing steadily for years before the passage of the law. They are still increasing on average, just not as steeply.

For instance, Anthem Blue Cross and Blue Shield, the largest insurance provider in Maine, increased its individual rate by an average of 1.7 percent in 2012. Harvard Pilgrim’s individual rates jumped by 3 percent. Both increases were much smaller than in years past.

Most businesses’ group rates have increased, too, but those increases have been smaller. Anthem’s average small-group rate, for example, increased by 15 percent in 2009, 21 percent in 2010 and 17 percent in 2011. This year, the increase was 11 percent.

“From the small-group perspective, the new rates are more reflective of the true cost of care in specific geographies of Maine, so there will be some variation,” said Anthem spokesman Chris Dugan.

McKane questioned why no one is talking about the positives.

“When was the last time 10 percent of small businesses got to decrease rates?” he said.

Joseph Ditre, executive director of Consumers for Affordable Health Care, said supporters are moving the goalposts.

“They were convinced this would have an immediate impact,” he said. “They said all businesses would pay less. That clearly has not happened.”

While some businesses have benefited and others have lost, the jury is still out for most.

Godfrey Wood, chief executive officer of the Portland Regional Chamber, said health insurance is the biggest problem for most members, but he hasn’t heard many opinions one way or the other on the new law.

Wood, who manages nine employees at the chamber, said he has had to wrestle with charging workers more in premiums to cover the increased cost, or offer other options for insurance that perhaps are not as good. Neither choice is tenable, he said.

One of the predicted outcomes of the law — an increase in the number of young people buying insurance — is still undetermined. Anthem has created an individual plan for 19- to 42-year-olds that offers as much as a 60 percent decrease, but it does not have to submit this year’s data to the state until April 2013.

Insurance Superintendent Cioppa said there will be no way to determine whether more young Mainers are buying insurance until then.

He said the “reinsurance” program created by the law, which encourages individuals to buy insurance by creating a risk pool, has been operating only since July 1. That’s not enough time to assess the individual market.

Starting in 2014, policy holders will be allowed to shop across state lines, which supporters believe will further drive down costs.

Ditre doesn’t buy that argument.

“Even if the rates go down, it’s not enough to entice people,” he said. “Plus, these new plans are bad plans.”

As each side argues about the impact, small businesses, which make up most of Maine’s economy and its health insurance market, remain at the mercy of insurance providers.

Bill Kelton, president of Maine Parts & Machine in Portland, said it has cost him 18 percent more this year to provide health insurance to his 36 employees. He always shops around for options, but said his choices are either to raise rates further or offer lesser coverage.

“No matter what, insurance rates seem to go up every year,” he said. “Who else gets to raise costs like that?”

Michele Johns, executive director of the Cancer Community Center in South Portland, said insurance rates for her six employees increased by just 3 percent, much less than she anticipated when she was drafting a budget.

“We’re feeling pretty lucky,” she said, “because generally it’s been more like a 20 percent increase.”

Staff Writer Eric Russell can be contacted at 791-6344 or at:

erussell@mainetoday.com

Twitter: @PPHEricRussell

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