House panel chairman gives resignation after health insurance fracas

Posted May 13, 2011, at 5:57 p.m.
Last modified May 13, 2011, at 9:15 p.m.

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Rep. Patrick S. Flood
Rep. Patrick S. Flood

AUGUSTA, Maine — State lawmakers were assessing the political damage Friday from a late-night blowup over health care reform that prompted the Republican chairman of the powerful budget committee to submit his resignation and has left Democrats fuming.

Rep. Patrick Flood, R-Winthrop, submitted a letter of resignation to House Speaker Robert Nutting, R-Oakland,  hours after a contentious meeting in which Democrats accused GOP leaders of attempting to ramrod a major policy issue through the Legislature and warned that the political moves could endanger the entire budget-writing process.

“He submitted a letter of resignation to me as chair. I have not accepted his resignation,” Nutting said Friday evening. “There will be a series of conversations this weekend and then we will be back in session on Monday. Appropriations will reconvene to continue their work on the budget.”

Flood could not be reached for comment on Friday. It was unclear whether his resignation was prompted by frustration with the Republican leadership’s push to complete the bill on Thursday and the deleterious effects on his committee’s bipartisan spirit or with Democratic committee members’ angry response.

The bigger question on Friday, however, was whether the bitter partisanship that has developed over a Republican bill to overhaul health insurance will extend to lawmakers’ efforts to craft a government spending plan for the fiscal year that begins July 1.

“This insurance bill was a setback, and it was particularly a setback for the budget process,” said House Minority Leader Rep. Emily Cain, D-Orono. “It can be recovered, but it is going to take a lot of good faith efforts.”

House lawmakers voted 78-68 largely along party lines on Thursday to pass a bill, LD 1333, which aims to reduce the high health insurance premiums paid by many Mainers by encouraging competition in the market and changing the way companies can set rates.

Beginning in 2014, Mainers who are purchasing individual insurance rather than through an employer could shop around for policies in the other New England states with the exception of Vermont. The bill also would allow smaller businesses to pool together when purchasing insurance in order to get lower rates.

But Democrats warned other aspects of the measure could drive up insurance costs dramatically for older Mainers and those living in more rural areas. That is because the bill would give insurance companies more discretion to base premiums on a person’s age, occupation and place of residence, and it removes restrictions on how far companies may require policyholders to travel for medical care.

Democrats accused Republicans of rushing the bill through the Legislature without even allowing the Maine Bureau of Insurance to perform the actuarial studies that would predict the measure’s impacts, both positive and negative. They also questioned who was behind the bill.

“I wouldn’t call it a Republican bill,” said Rep. John Martin, D-Eagle Lake. “I would call it an insurance company bill that happens to be sponsored by Republicans.”

The Senate had already endorsed the bill earlier in the week on a less partisan 24-10 vote and was expected to give the measure final approval on Friday. But Democrats, already angered by the GOP’s rejection of a half-dozen amendments in the House, blistered at the Republicans’ late-night move to bypass the Appropriations Committee. That committee is supposed to consider bills that affect the budget before they finally are enacted in the Senate.

“I feel extremely disrespected,” said Rep. David Webster, D-Freeport, a member of the Appropriations Committee. “I think this is shameful.”

Flood, a moderate Republican known for his bipartisan approach on budget issues, did not speak much during a testy, 30-minute Appropriations Committee meeting that followed the House debate late Thursday evening.  But he was clearly upset.

Meanwhile, on Friday, Democrats were still hammering Republicans on several aspects of the bill, including one provision that they say constitutes a steep tax increase on Maine families.

The bill creates a high-risk insurance pool for the chronically ill or those who struggle to find affordable coverage because of pre-existing medical conditions. Creating a separate program for high-cost individuals subsidized by the state will, according to supporters, lead to lower rates for other policyholders.

The pool, known as the Maine Guaranteed Reinsurance program, would be funded through a $4-per-month fee charged on every individual covered by an insurance policy in the state. Democrats insist that charge would amount to a $192 annual tax increase for a family of four. Should the fee rise to $6 per person, as allowed under the law, that would equate to a $288 tax increase.

“It is a flat tax on all policies, and not even by household,” Cain said. “It is on every person on that policy.”

During Thursday’s House debate, Democrats pointed out how Republicans had accused them of passing a “baby tax” by approving a bill that funded the controversial Dirigo Health program through a 2.14 percent assessment on all medical procedures, including childbirth.

The alleged “baby tax” was a popular sound bite during last November’s gubernatorial and legislative campaigns, appearing in a television ads purchased by the Maine Republican Party and in fliers purchased by a national GOP political action committee against Democratic lawmakers.

On Friday, Republicans acknowledged they were not happy with the fee, either, but said it was a necessary change that would lower costs for all policyholders by subsidizing the care for the small number of people in the high-risk pool.

“To fix health care for those folks who desperately need it without punishing them, we needed to find a way to do it,” said Rep. Andre Cushing, R-Hampden, the House assistant minority leader. “The assessment was the most equitable way to do it.”

Gov. Paul LePage has been a vocal supporter of the Republican-drafted health insurance bill. But LePage ran on a strict, lower-tax platform during the campaign and has vowed to veto any budget that does not lower taxes for Mainers.

LePage spokeswoman Adrienne Bennett said the 2.14 percent assessment on medical procedures as part of Dirigo Health generated about $50 million a year. The $4 fee will generate substantially less — estimated at up to $35 million.

“So we see this as a reduction in the tax,” Bennett said, adding that the governor would prefer to fund the program from the General Fund.

“He is not 100 percent on board with this plan, that is fair to say,” Bennett said. “He certainly does not support a tax increase. But we look at it as a step in the right direction.”

Cain, however, pointed out that the $4-per-month fee in the Republican-drafted bill applies to all policyholders, regardless of whether they even see a doctor during the year much less have a medical procedure.

The Senate is expected to take up the bill on Monday. The Appropriations Committee is also expected to resume its work on Monday, albeit potentially under a different House co-chair.

Nutting, the House speaker, agreed that the tone in Augusta turned sour but said he does not believe it will have a lasting  effect on the budget-writing process, which he said has been set back two days by the discord.

“It is a little early in the session to have such a partisan divide that leads to late-night politics and posturing,” Nutting said. “But this, too, shall pass and we will get back to working on the budget.”

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