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(Augusta) The Maine Center
for Economic Policy (MECEP) and Consumers for Affordable Health Care
(CAHC) asserted that a report by Gorman Actuarial to be presented to
the Maine Legislature's Joint Standing Committee on Insurance and
Financial Services (IFS) today confirms key criticisms opponents raised
about PL 90, the rollback
of health insurance protections enacted in 2011.
"Gorman Actuarial
found that thousands of older Mainers and small businesses in rural
Maine must now pay more for health insurance under the new law,"
said MECEP Executive Director Garrett Martin. "It validates MECEP's analysis last spring which
warned that while some individuals and businesses would realize lower
rates, others would see their costs increase. PL90 is a flawed law that
the Governor and the Legislature must act to fix. It gives too much
power and profits to private insurance companies, undermines important
consumer protections, and fails to address the issues that result in
out-of-control health care costs. "
"Ironically, the
Gorman Actuarial report points out that the Affordable Care Act (ACA)
passed by Congress in 2010, not PL90, will provide real savings for
consumers in the long run," said CAHC Policy Director Mitchell
Stein. "It is vitally important that the LePage Administration and
Legislators do everything they can to maximize the potential benefits
of the ACA for Maine people and businesses now. At a time when Maine
people and businesses are struggling, we can ill-afford ideologically
driven policy prescriptions. Ignoring credible information and
fact-based analysis is akin to giving every patient the same treatment
regardless his or her condition."
The Maine Bureau of
Insurance commissioned the report, "The Impact of PL90 on
Maine's Health Insurance Markets," as an independent analysis
of the new law's effects on the state's consumers. MECEP and CAHC
maintain that a comparison of what proponents of PL90 said about the
law during the 2011 legislative deliberations and the conclusions of
the Gorman Actuarial report clearly demonstrates that many claims by
PL90's supporters were mistaken.
What proponents of
PL90 claimed about its potential impact on consumer premiums:
"LD 1333...will not
increase premiums on older people." - Governor LePage, May 29, 2011
"LD 1333 will not fix
the high cost of health care itself but will lower the cost of health
insurance for all Maine citizens." - Senator Whittemore from
Somerset, May 11, 2011
"I've heard that the
changes to community rating are going to hurt those living in rural
Maine and older Mainers. I disagree..." - Representative McKane
from Newcastle, May 12, 2011
What Gorman
Actuarial found:
"Beginning July 1,
2012, insurers can charge rates using a 3-to-1 age band on the open
block and additionally can surcharge premiums up to 50% for geography.
This change will result in higher premiums for the older demographics
and for individuals who live in more expensive regions." - The
Impact of PL90 on Maine's Health Insurance Markets, p. 14
"11% of groups which
include 7% of Small Group members will experience premiums more than
10% higher (average 20%) than what they would have experienced in the absence
of PL90. In general, these are groups with higher average ages or
groups located in areas of Maine with higher geography rating factors.
(Down East, North, and North Central)" - The Impact of PL90 on
Maine's Health Insurance Markets, p. 25
MECEP and CAHC acknowledged
that some individuals and small businesses, primarily in the individual
insurance market have experienced rate decreases but noted that the
Gorman Actuarial report attributes these savings to the subsidy PL90
gives to insurance companies that is funded by a monthly fee paid for
by those who have private insurance. They again cited claims PL90
proponents made last spring with the report's findings.
What the proponents
of PL90 claimed about the new law's $4 per month "fee" on
private insurance premiums:
"The $4 per month
assessment...will help cover the claims of individuals with high
medical costs. We anticipate the $4 assessment will be lowered during
the next year or so as well." - Governor LePage, May 29, 2011
What Gorman
Actuarial found:
"... a $5 million
deficit after applying the full $4 PMPM (per member per month) market
assessment. The optional assessments to cover net loss could be used to
cover this deficit...this translates to 89 cents per assessed member
per month, in addition to the $4 PMPM." - The Impact of PL90 on
Maine's Health Insurance Markets, p. 11
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The Maine Center for
Economic Policy advances public policies that help Maine people prosper
in a strong, fair and sustainable economy. We advance this mission
through high-quality research, analysis, citizen education and
coalition building. MECEP is an independent, nonprofit, nonpartisan
organization.
Consumers for Affordable
Health Care is a non-profit, non-partisan organization that has
been helping Maine people get quality, affordable health care for more
than 20 years. If you have any public or private insurance
questions please call our toll free consumer HelpLine at
1-800-965-7476.
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