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(Augusta)
Maine's largest consumer health organization, Consumers for Affordable
Health Care, released a report today based on insurance company filings
with the Maine Bureau of Insurance. The report, entitled Few
Winners, Many Losers: Evaluating the Impact of Key Provisions of
Maine's New Health Insurance Law To Date, found that Maine's new
health insurance law called Chapter 90, passed by the new Republican
majority in the Maine Legislature amid a firestorm of controversy last
year, resulted in the following:
- higher
premiums for the majority (54%) of individual policyholders,
- higher
premiums for the overwhelming majority (90%) of small business
policyholders especially those with older workers or in rural
areas,
- worsened
product choices in the individual market,
- higher
taxes ($22 million) on all insureds in Maine for a reinsurance
program that supported higher profits to the state's largest
insurance company for its individual product ($1.8 million),
- weakened
consumer protections including how insurance company rates are
reviewed.
The
report, Few Winners, Many Losers: Evaluating the Impact of Key
Provisions of Maine's New Health Insurance Law to Date, used
filings with Maine's Bureau of Insurance that reflected the new law.
Four key provisions of the new law were evaluated:
- individual and small group premium rates;
- closed
books of business and new product choices;
- the
new reinsurance tax on all insured Mainers;
- the
new standard for reviewing individual rate filings.
In
each category, the insurance company filings and Bureau determinations
showed higher premiums, worse product choices, higher profits to
Maine's largest individual insurer, and weaker review standards.
Joseph
Ditré, executive director of the consumer group and author of the
report said "The report used statewide insurance company filings
rather than local anecdotes. The filings clearly refute claims by the
new law's proponents. The promise of new young, healthy uninsureds
returning to the health insurance market and thereby lowering prices
for everyone is just not happening. What is happening is that insurance
companies are raising premiums on small businesses in all geographic
areas, especially on businesses with older workers and those in
rural areas. That means businesses and individuals, who have been
paying high rates just to keep their coverage, may now be forced to
drop their coverage based on a false promise."
WoodenBoat Publications Inc., a small business
located in Brooklin, Maine, faced significant rate
increases in 2011 and were forced to cut back on their plan,
which covers 31 employees. Even with less coverage and an already
high deductible, their quote this year was a rate increase of more than
32%, an increased cost to the business of $75,144.
"This increase is a huge problem for us. I've said for a while
that I'm running out of bunnies to pull out of the hat. Now, I'm
completely out of bunnies. I don't know what we'll do in the
future," said Jim Miller of WoodenBoat. "They're basically
selling health insurance based on your zip code and your age and for
this company, based in Brooklin, Maine, both of those are going against
us."
Unfortunately, they
are not alone. Among the key findings in the report are that
premiums increased for the overwhelming majority of small businesses
throughout every geographic area in the state, the areas with the most
increases were in the counties of Aroostook, Penobscot, Piscataquis,
Knox, Hancock, Lincoln, Waldo, and Washington. Among the few decreases
that did occur, they did not have as much of an impact as proponents of
the law had hoped for. Specifically:
- Over
ninety-six percent (96.3%) of small businesses in Northern Maine
received rate increases under Chapter 90 in the two quarters (4 Q
11 and 1 Q 12) shown; less than four percent (3.7%) received rate
decreases.
- Almost
ninety-seven percent (96.6%) of small businesses in Eastern Maine
received rate increases under Chapter 90; while less than four
percent (3.4%) received rate decreases.
- A
full ninety-three percent (93%) of small businesses in Central
Maine received rate increases under Chapter 90; while only seven
percent (7%) received rate decreases.
- Almost
ninety-seven percent (96.6%) of small businesses in Western Maine
received rate increases under Chapter 90; under four percent
(3.4%) received rate decreases.
- Almost
eighty-five percent (84.5%) of small businesses in Southern Maine
received rate increases under Chapter 90; while almost sixteen
percent (15.5%) received rate decreases.
The
new law also significantly weakens the rate review process, as the
report describes in detail. The rate review process had saved Maine's
Anthem policyholders at least $2 million in 2011 alone and, had Chapter
90 been in place at that time, none of those savings would have been
realized.
The
report confirms the arguments made by opponents of the new law as it
was being pushed through the Maine Legislature in 2011. There was a
grave concern that the law would further create "Two Maines"
and create a few winners in urban Southern Maine at the expense of
rural areas in the majority of the state, particularly Northern and
Eastern Maine. Older people living in rural areas are being hit the
hardest. Proponents of the law said that an influx of young insureds
would help to lower costs for everyone, but there is absolutely no
indication that has happened.
To
view the complete report, please click here.
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