Last year, in the midst of the worst economy in generations, Anthem proposed a health insurance rate increase of 9.7 percent, building in a 3 percent guaranteed profit margin. While middle class families and small businesses are squeezed in this tough economy, the state’s largest insurer then spent big money appealing the Bureau of Insurance superintendent’s decision to knock its rate increase down to 5.2 percent and a 1 percent profit margin.
Fortunately, the Maine Supreme Judicial Court sided unanimously with former Superintendent Mila Kofman, ensuring that more money will stay in the pockets of middle-class families and less of our money will go to Anthem’s profit margin.
At the same time, the Maine Legislature passed and Gov. LePage signed into a law a complete overhaul of Maine’s health insurance regulations referred to as “Public Law 90.”
Aside from lessening regulations on Anthem, the Republican health care overhaul also eliminated the very process for review and approval of health insurance rate hikes that allowed our former insurance superintendent to save money for middle-class families and small businesses.
I have sponsored legislation, LD 1179, to restore the process that ensures our superintendent of insurance will have the tools necessary to increase transparency and accountability in potentially unnecessary health insurance rate hikes.
Last week, the Maine House, on a party line vote, defeated the needed protections in that bill.
Sadly, this is not the only example of how Republican policies in Maine have made it harder for Maine people to pay for their health insurance. The recently passed insurance overhaul allows insurance companies — the same ones that have the gall to seek a 3 percent guaranteed profit margin in this economy — to charge older Mainers five times more than our younger neighbors.
On top of this age cherry picking, the law sets no limits on how much more a company can charge a policyholder based on where they live or what type of work they do. That is right, an insurance company can vary premiums as much as they want based on what type of work a Mainer does. A logger or lobsterman would get one rate and a lawyer or banker would get another.
We in the Legislature got our first nonpartisan report on the impact of this law in January. Gorman Actuarial confirmed that the insurance overhaul created winners and losers. The report stated that the new law “will result in higher premiums for the older demographics and for individuals who live in more expensive regions.” These increases are substantial, as 11 percent of groups will see their premiums jacked up 10 percent more than they would have in absence of the new Republican health care overhaul.
The groups targeted for the rate increases have “higher average ages” and live in geographic regions including Down East, north and north-central Maine.
Earlier this month, I read in the Bangor Daily News that Republicans in the Legislature have decided, after nearly two years of work, to continue dragging their feet on setting up a state-based health care exchange. Middle-class families are being squeezed by the cost of health insurance in this tough economy, and we know that a state health care exchange will help put more money in the pockets of those families and small businesses though lowering the cost of seeing a doctor.
The Kaiser Family Foundation has a tax credit calculator that can help folks see how much they could save if legislators stop dragging their feet and implement a health care exchange. A family of four in Maine earning the median income of $46,000 a year could get at a credit of up to $10,000 a year towards health care expenses. Election-year politics based on hopes of the Affordable Care Act being overturned in a court or currently unknown election results should not hinder our shared goal of lowering health care costs.
Democrats on the Insurance and Financial Services Committee are supporting a well-thought-out and consumer-friendly exchange. I am hopeful the Legislature will support an exchange that allows Mainers to qualify for discounts, that gives our small businesses the same coverage as members of Congress and that complements new laws preventing insurance plans from discriminating against women by charging them higher rates than men.
It is time for decision makers to protect Maine people, not Anthem and their hopes for guaranteed profits.
Adam Goode is a Democrat who represents part of Bangor in the Maine House of Representatives. He serves on the Insurance and Financial Services Committee in the state Legislature.