Here in Maine, we’ve heard this health care “reform” hype before: “We are going to insure the uninsured.” “It will be a self-sustaining program.” “It will bring competition to the health insurance market.” And on and on — grand promises about big government experiments in health care. Maine has been a petri dish for such experiments and from the taxpayers’ and the health insurance premium payer’s point of view, the experiments have failed. Now we are hearing the same promises at the national level.
Message to Congress: Been there, done that. Please take a long look at Maine before you make the same mistakes we have made.
First, a little background. Maine has one of the most, if not the most, overregulated health insurance markets in the country. Because of our extraordinarily burdensome regulations Maine has essentially one insurer left in the individual health insurance market — Anthem. This de facto monopoly means we pay some of the highest premiums in the country.
To remedy this — instead of relaxing regulations and giving the free market a chance to recuperate through real market reform — the thought was to get the government more involved to solve a problem that the government created! One idea was to bring competition to our monopoly carrier, Anthem, with Maine’s “government option,” Dirigo Choice. Oddly enough, Anthem was the insurance company that administered Dirigo Choice for the first three years. How’s that for competition?
The funding for the Dirigo Program was through a complex plan called the savings offset payment or SOP. The SOP determined through a complex formula exactly how much money Dirigo saved the health care-health insurance system of Maine and then would tax insurers that amount. If it sounds impossible, it was. The formula showed that Dirigo was saving money all around the country. In the end, the SOP always resulted in enough to keep Dirigo afloat and to keep paying the six-figure salaries of Dirigo administrators.
Although these taxes on health insurance have indeed made premium rates rise, it was believed that the more people we enrolled in Dirigo the more money we would save. We are seeing the same twisted logic at the national level.
Needless to say, Dirigo Choice hasn’t worked out as planned. It has failed to come even close to its goals. The Maine people have spent hundreds of millions on this program to date and we don’t even one-tenth of the promised number insured and our health insurance premiums, in both the individual and group markets have risen to some of the highest in the country.
Nationally, we’ve heard about the need for a public — or government — option. On the nightly news recently, I heard that the Obama administration is quite confident that this public option plan will pay for itself “if anticipated savings to the system are realized.” Sound familiar?
We’ve also heard that this public option will bring more competition to insurers. Yeah, we heard that, too — it doesn’t. And we are told that insurers will no longer be able to deny coverage for a pre-existing condition. Dirigo Choice has no pre-existing exclusion clause, so enrollees could simply wait until they got sick to sign up. Why bother to pay thousands in premiums each year if you don’t need to pay until you need health care? The predictable result for Dirigo was adverse selection — their pool of insured was unhealthy and therefore very expensive to cover.
Also, this new public plan is also going to expand Medicaid far beyond its original scope. Yup, we did that here in Maine — and it has helped bust our state budget and weaken our state economy.
And don’t forget guaranteed issue and community rating. Nothing has hurt Maine’s insurance market more that these two mandates. The Obama plan hopes to impose them on the whole country.
Why should we expect different results if Washington imposes a Maine-like plan on a much grander scale? We shouldn’t. Because we’ve been there, we’ve done that. We have shown the country exactly what not to do.
Our big-government experiments in health care in Maine have failed miserably. Left-wing cheerleaders such as Maine Center for Economic Policy and Consumers for Affordable Health Care, however, will attempt to paint the truth to claim Dirigo and the heavy-handed regulations (now called reforms) have worked. Those of us who have lived under this oppressive health care regime in Maine know better.
Rep. Jonathan McKane of Newcastle is a Republican serving in his third term in the Maine Legislature.