Monday, March 10, 2014
By Rod Whittemore
When is the last time you heard good news about health insurance?
I'm glad to say there's plenty to report, here in Maine, anyway.
The warnings two years ago from Democrats in the Legislature about Maine's new health insurance law were dire: It was going to end health insurance as we know it, making it inaccessible to average Mainers, and send everyone's premiums skyrocketing. In short, a disaster.
As the former chair of the Insurance and Financial Services Committee, and having played a major role in getting this bill out of committee, through the Legislature and onto the governor's desk for his signature, I am proud to tell you just the opposite has happened.
After a decade of becoming accustomed to double-digit increases as high as 19 percent, most Maine businesses are seeing one of two things in their company plans: a significant reduction in the amount of their increase or an actual reduction.
The new law, now known as Public Law 90, was designed to introduce more competition in Maine's health insurance market.
This was achieved, in part, by loosening the community ratings bands that forced insurance companies to charge everyone roughly the same rate, regardless of risk, age group and other factors.
The law also will eventually allow Maine residents to purchase health insurance across state lines, and it prohibits insurance companies from denying coverage because of pre-existing conditions.
The results have been remarkable.
In the fourth quarter of 2010, before the implementation of PL 90, only 2.9 percent of Maine businesses saw a decrease in their premiums. A year later, after PL 90 had taken effect, 9.4 percent saw a decrease.
In the fourth quarter of 2012, the number of businesses who saw a decrease skyrocketed to 17.5 percent.
Recently, Democrats, still apparently in campaign mode, have been declaring that most businesses have seen a premium increase since the passage of PL 90. But they are being intentionally misleading.
Before PL 90 became law, 9.2 percent of Maine businesses saw rate increases in excess of 40 percent. The reforms cut that number by more than half, to 4.4 percent in the fourth quarter of 2012.
Most of the premium increases businesses saw over the last year were dramatically lower than the ones they had seen in recent years.
When the new law was passed, a minority of businesses -- mostly in northern, rural areas -- did see sharp increases.
But the latest figures from Maine's Bureau of Insurance indicate that their rates are now dropping.
What's even more encouraging: According to the bureau, the number of Mainers purchasing health insurance -- particularly young residents -- is on the rise, because PL 90 has made it more affordable.
With more people buying health insurance, the rates will continue to decline.
The success of Maine's new health insurance law serves as a testament to the power of the free market and contrasts sharply with the Democrats' government-run approach to health insurance that led to skyrocketing rate increases and fewer people having access to insurance.
Predictably, Democrats, who are now in control in the Legislature, have indicated they want to gut PL 90, despite its successes, probably because it differs from the state-controlled model they prefer.
They have submitted a number of bills that would chip away at the provisions in the new law that have led to premium reductions and more choices for Maine consumers.
As the ranking Republican on the insurance committee, I plan to do everything in my power this legislative session to protect the new law that is finally bringing relief to Mainers who have, up until the past two years, been conditioned to expect the worst when their insurance bill arrives.
State Sen. Rod Whittemore, R-Skowhegan, serves on the Legislature's Insurance and Financial Services Committee.