Gov. Paul LePage was the subject of a glowing editorial in the May 31 Wall Street Journal. It praised him and the Republican majority in the Legislature on the passage last year of the health reform law, PL 90. But the editorial neglected to account for what could amount to a cost shift.
Maine’s dominant insurer, Anthem, is planning for some premium rates under its new HealthChoice Plus product to be as much as 69 percent less than than its previous HealthChoice product.
For example, an 18-year-old woman with one child would have paid $968 per month under HealthChoice, with a $2,250 deductible. But under HealthChoice Plus she is estimated to pay $297 per month, with a $2,000 deductible.
As the Wall Street Journal stated, any premium decrease is remarkable. That’s true, but it’s not the whole picture. Anyone looking to join a health insurance plan knows to examine not just premiums but what procedures and services are covered and whether the deductible is affordable.
Under the new HealthChoice Plus product, the deductible reaches as high as $24,000 for a family. While the deductible for a family was $30,000 under the old product — and therefore the new product is a decrease — a possible $24,000 deductible is still extremely high for an average family.
At the same time, the new plan proposes to cover only a certain percentage of the cost of medical service once the deductible is met. The co-insurance under the old plan was 100 percent. And, there’s a reduction in covered benefits under the new plan, including no maternity coverage and more restrictions on drugs and services.
The Wall Street Journal based its praise of Maine’s deregulation effort on the projected premiums of one company, without a full comparison of Anthem’s products. It also did not fully examine what might happen to Maine’s older population as a result of the state’s health reform law.
The law aims to draw in more younger, healthier, uninsured customers, for whom companies don’t have to pay out as much. But where are the younger people, and would they really pay rates like the ones Anthem is projecting? The premium might be proposed to drop from $616 to $233 per month for a 25- to 29-year old, but that’s still a hefty sum of money for a person just starting a career, especially when considering the $2,000 deductible.
What could happen instead is that the costs will shift to older, often poorer, people living in rural areas. This is especially true because Maine’s new health law allows insurers to base rates more on age, in addition to geography and tobacco use. Sure, Anthem is planning to lower its premium rates. But at what cost? And for whom?
Correction: A previous version of this editorial incorrectly stated that the family deductible under Anthem's HealthChoice plan was $15,000. It was $30,000.