Health insurance costs have soared over the past decade for employer-based insurance, with workers’ costs in Maine increasing 69 percent from 2008 to 2018, according to a report issued Thursday by a national health policy foundation.

In Maine, the average employee’s out-of-pocket costs – a combination of premiums, copays and deductibles – surged from $4,670 in 2008 to $7,879 in 2018, according to the report by the New York City-based The Commonwealth Fund. Across the United States, average employee costs rose from $4,160 in 2008 to $7,388, an increase of 78 percent.

The rising cost of health insurance is especially dramatic when it comes to deductibles for Mainers, with average annual deductibles paid by employees rising from $1,404 in 2008 to $3,519 in 2018, a 151 percent increase. Health insurance premiums for Mainers with employer-based insurance have increased at a slower pace, from $3,266 a decade ago to $4,360 in 2018, a 33 percent jump.

While the United States has undergone major health insurance reforms since 2008, and the passage of the Affordable Care Act in 2010, not enough has been done to control health care costs, experts say.

“The sad conclusion is that there’s little that’s being done to control costs,” said Mitchell Stein, a Maine-based independent health policy analyst. “Costs are continuing to erode everyone’s pocketbook.”

Stein said Maine is a rural state with many small employers, and that could explain why deductible costs are skyrocketing here. Average deductible costs in Maine were $3,519 in 2018, while the national was $2,992. Small companies are more likely to increase deductibles if they offer health insurance to workers because that’s generally more affordable for an employer than health plans that can pay 70 percent to 80 percent of premium costs and include smaller deductibles, he said. Mainers pay the fifth-highest deductible costs, trailing only New Hampshire, Arizona, Minnesota and South Dakota.

High deductibles can be a roadblock to patients getting the treatment they need, The Commonwealth Fund said. That’s because employees have to pay the entire deductible before insurers begin to share the costs.

“Research has indicated that high deductibles can act as a financial barrier to care, discouraging people with modest incomes from getting needed services and leaving them effectively uninsured,” the report said.

Ann Woloson, executive director of Maine-based Consumers for Affordable Health Care, a health policy advocacy group, said the good news in Maine is that, starting in 2019, the state expanded Medicaid under Gov. Janet Mills and that will help control health care costs moving forward.

That’s because when a hospital treats someone who is uninsured, and the patient cannot pay, those costs are passed along to those with private insurance. Medicaid expansion will lead to a lower uninsured rate in Maine, and so far more than 40,000 Mainers have signed up for Medicaid this year.

A 2018 study by Johns Hopkins University estimated that states that expand Medicaid reduced the cost of private insurance by 11 percent when compared to nonexpansion states.

Woloson said the Legislature’s standing committee on health insurance is meeting this fall and winter and will consider many ideas to control health care costs.

“The Mills administration has taken initial steps to understand why costs are increasing, in an attempt to address them in a meaningful way,” Woloson said.

Woloson said the Maine Legislature passed several bills last session that aim to reduce the cost of prescription drugs, such as the Prescription Drug Affordability Board, which will regulate prescription drug prices by requiring drug manufacturers to justify steep increases. The board, which is set to have its first meeting next spring, will be similar to a public utilities commission, with prescription drugs as its jurisdiction. Maine also will allow for the importation of Canadian drugs, but the state is awaiting federal approval to conduct bulk purchases of Canadian drugs.

Stein said that while it’s difficult to predict the impact of state reforms, what he’s seen so far in Maine and other states are modest reforms that do not get at the heart of controlling costs.

“I believe the true solution will have to come at the federal level,” Stein said.

Woloson said the ACA is part of the reason health insurance costs have increased because before the ACA, premiums were lower, but the plans covered less. For instance, the ACA forbade insurance companies from excluding people with pre-existing conditions, and mandated that plans cover certain benefits, such as for mental health and substance use treatment. So enrollees are paying higher premiums and deductibles, but insurance companies can’t exploit loopholes that would put patients at risk of medical bankruptcies.

“The coverage people are getting now compared to 10 years ago is much more comprehensive,” Woloson said.

 

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