LD 1333: Key provisions of Maine’s health insurance overhaul bill

Posted May 12, 2011, at 10:12 p.m.
Last modified May 13, 2011, at 1:50 p.m.

• A change in rate structure that gives health insurance companies more freedom to charge higher rates to Mainers who are older, sicker and live in rural areas. Supporters of the measure say the expanded “rating bands” will allow insurers to charge significantly less to younger, healthier Mainers and spread the risk over a larger pool.

• The creation of a “high-risk pool” to cover Mainers who use a lot of health care services. The benefits offered in this separate group are not spelled out in the bill and would not be subject to state mandates that govern the general insurance market. The high risk pool would be established as a quasi-governmental program similar to the Dirigo Health Agency and funded through a $4 assessment added to the monthly premium of every Mainer with private coverage. The monthly assessment could rise as high as $6 before requiring additional rulemaking.

• The repeal of “Rule 850” a 1991 regulation that protects Mainers from having to travel more than 30 minutes from their home for primary care and more than 60 minutes for hospital services. Promoters say the measure allows insurers to provide consumers with financial incentives to seek high-quality, low-cost care outside their immediate communities. Skeptics fear it will create financial hardships for Mainers who choose to get their care close to home, keep some from seeking the care they need and jeopardize the financial stability of small, rural hospitals.

• The marketing of out-of-state insurance plans in Maine, as well as the banding together of certain businesses to form insurance-buying groups. While supporters say these measures will help spur competition in the market, others predict out-of-state companies will “cherry-pick” Maine’s healthier, younger consumers. Plans known as “association health plans” will not be subject to Maine’s insurance regulations.

• The repeal of the State Health Plan, a biannual assessment of health care facilities and services available in Maine, aimed at ensuring cost-effective investment and development. The bill also disbands the Advisory Council on Health Systems Development, a 20-member group representing consumers, hospitals, insurers and public officials and charged with finding cost savings in the health care system.

• Several provisions that conflict with the rollout of the Affordable Care Act national health reform in Maine, including one that limits the coverage of children 26 and under on their parents’ health insurance to those dependents who reside in Maine.

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