Small-business bill revives debate over Maine health reform law

Posted Feb. 15, 2012, at 6:07 p.m.
Last modified Feb. 16, 2012, at 7:08 a.m.

AUGUSTA, Maine — A bill to expand health insurance options for Maine’s smallest businesses resurrected debate Wednesday about the state’s controversial health reform law.

Sponsored by Sen. Jon Courtney of Springvale, the bill sought to expand a provision of the reform law passed last spring that overhauled the health insurance market for about 40,000 people who buy individual coverage or through employers with fewer than 50 workers, known as the small group market. The law also created a separate pool to cover the sickest residents in the individual market.

Courtney’s bill would allow businesses, specifically those with fewer than 10 employees, to join individuals in the risk pool.

The legislation highlighted a divide between supporters of the reform law, who say it has lowered health premiums for many Mainers, and opponents, who argue those savings have come at the expense of older residents in rural areas.

Courtney, the Senate Republican majority leader, asked members of the Legislature’s Insurance and Financial Services Committee to use his bill as a starting point to explore ways to improve the reform law.

“The intent is to make sure that through market-based reforms we reduce the cost of health insurance for as many people as possible,” he said.

Under the law, microbusinesses will be hit by greater premium fluctuations than their larger counterparts, according to an independent consultant’s report presented to lawmakers last month.

Courtney’s bill made no mention of how to pay for expanding the risk pool, known as the Maine Guaranteed Access Reinsurance Association. Courtney said he’s open to an additional fee to allow microbusinesses to participate, touching on a topic that’s long divided the parties.

Republicans have railed against fees on insurance claims that fund the state’s Dirigo Health program, and last year passed legislation to phase out the assessment. They’re now negotiating the phase-out with Democrats, who are resisting further cuts to health care coverage, in deliberations over the state’s Department of Health and Human Services budget.

The risk pool outlined in the reform law is funded primarily by a fee charged to nearly all private policyholders in the state. Insurers also pay a fee for each member they relinquish to the pool.

Rep. Sharon Treat of Hallowell, the ranking Democrat on the committee, said the consultant’s report raises doubts about whether the pool will have enough money.

“That fund right now potentially is short up to $30 million just covering the claims that might be put into it,” she said.

The report, prepared by Gorman Actuarial of Massachusetts, said a shortfall could result if insurers are charged too little for the policies they cede to the risk pool.

Many of the groups testifying on the bill, including both insurers and consumer advocates, supported its intent to alleviate small businesses’ health care costs, but remained uncertain of its potential effects.

Mitchell Stein, policy director for Consumers for Affordable Health Care, argued for greater transparency in the reform law. He suggested that the bill be amended to state that the reinsurance association’s meetings are open to the public.

“We feel it only right that their activities be done in public view, not behind closed doors,” he said.

The committee also heard testimony on a second bill that sought to clarify some provisions of the law. Work sessions on both bills are scheduled for next Wednesday.

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