Tuesday, December 10, 2013
AUGUSTA – Maine legislators are scrutinizing a new $25 million annual fund -– paid for with a $4 monthly tax on each Mainer covered by private health insurance – that helps insurance companies offset the cost of high-risk individual policy holders.
The tax and the "reinsurance fund" were approved as part of controversial health insurance reform that the Republican-led Legislature passed in 2011.
With Democrats back in the majority, the Legislature's Insurance and Financial Services Committee is asking questions about the fund and the private, nonprofit association that runs it, behind closed doors and without input from consumers.
On Thursday, the committee's House chairwoman, Sharon Treat, D-Hallowell, asked Maine Insurance Superintendent Eric Cioppa to provide meeting minutes and other communications from the Maine Guaranteed Access Reimbursement Association.
"This is ratepayers' money," Treat said after the committee meeting. "The board is set up by the state. There's no reason they couldn't have public meetings and go into executive session when necessary."
Treat noted that last year, board members opposed a legislative effort that would have made their meetings public.
The committee's Senate chair, Geoffrey Gratwick, D-Bangor, questioned why Cioppa is allowed to attend the board meetings but members of the public, including legislators, have been banned.
"Theoretically, you're a subsidiary of the Legislature, and you can go, but the public can't?" Gratwick asked Cioppa during the meeting.
Gratwick also questioned why the association's 11-member board, which started meeting in late 2011, includes no apparent consumer representatives.
Gratwick referred to a list of board members, appointed by the superintendent, that shows only insurance and health care representatives. By law, the board should have at least two consumer representatives.
Cioppa indicated that he would provide the minutes and said the board holds closed-door meetings like those of other private, nonprofit associations.
The committee also sought information on how the state's reinsurance program is expected to work with a much different federal reinsurance program that's expected to begin operating in 2014 under the Affordable Care Act.
Treat asked for copies of letters that Cioppa and the association's board sent to federal officials, asking that the state's reinsurance program serve in place of the federal program.
Maine's reinsurance fund began operating in July 2012. It collects $4 monthly assessments on more than 500,000 Mainers covered by individual, small-group and large-group health plans. For a family of four, that's $16 per month, $192 per year.
Through November, the fund had taken in $14.25 million, said Christopher Howard, a lawyer with Pierce Atwood in Portland who works for the association. The fund also collected $6.6 million in premiums paid by insurance companies that sell health insurance policies for individuals.
In Maine, Anthem BlueCross BlueShield, MEGA Life and Health Insurance Co. and Harvard Pilgrim Health Care sell individual policies in a market representing about $168 million in annual premiums, Cioppa said.
The fund will cover the higher costs of 3,225 individual policy holders who have qualifying high-risk health conditions or were voluntarily designated by their insurance providers, Howard said.
The insurance companies submitted about $5 million in claims through December and the association started issuing reimbursements Jan. 6, Howard said.
Treat asked for a list of reimbursements to each company.
The fund is expected to lower premiums for all 34,000 to 36,000 individual policy holders by 10 percent to 15 percent, Howard said, but it's too early to see that kind of result.
Howard noted that Anthem had anticipated an average rate increase of 21 percent on individual policies in 2012, but it had just a 1.7 percent average increase under the fund.
Staff Writer Kelley Bouchard can be reached at 791-6328 or at: