AUGUSTA, Maine — Seven bills that would roll back controversial health insurance reform passed in 2010 began their journey through the Maine Legislature this week.
Members of the Insurance and Financial Services Committee on Thursday began taking testimony on the bills offered by Democrats that would, according to rival Republicans, gut the health insurance reforms collectively known as Public Law 90.
The law created a high-risk insurance pool and a $4 monthly fee on all health insurance policies to fund it.
The bill also set up a private, nonprofit corporation to administer that pool and eliminated requirements that insurance-rate hikes of less than 10 percent be reviewed in a public process by the state’s Bureau of Insurance.
Supporters of PL 90 say it’s driving down insurance rates, especially small-group and individual market rates in younger and more urban parts of Maine. They argue that will create bigger pools of healthier people that will eventually lead to lower rates for all Mainers.
One of the bills heard Thursday would require all insurance-company-proposed rate increases — no matter the size — to go to public hearings. Current law says only rate hikes above 10 percent need public review. Increments smaller than that can be processed, with oversight from only the Bureau of Insurance.
Other bills would make public the meetings and records of the Maine Guaranteed Reinsurance Association, which administers the high-risk pool for companies offering health insurance in Maine.
That pool is funded to the tune of $20 million a year by the $4 monthly fees paid on the policies of everyone with privately funded health insurance in Maine.
That pool, according to supporters of PL 90, is a big reason insurance-rate increases in other markets in Maine have slowed dramatically, compared to years past.
But the committee heard a long list of complaints about how the law had sent insurance rates skyrocketing, especially for older and more rural Mainers.
Elizabeth McSwain, a small-business owner in Boothbay Harbor, said group rates for her six-person company shot up 34 percent in 2012 after they shot up 26 percent in 2011.
“We’ve been repeatedly slammed by rate increases,” McSwain said.
Rep. Nathan Libby, D-Lewiston, an author of one of the bills that restores the public review and prior approval provisions in the old statute for small groups, said some people might be benefiting from PL 90.
“We can all agree it lowered health insurance premiums for many Maine people but drastically spiked premiums for some Maine people,” Libby said.
Sen. John Patrick, D-Rumford, who has a bill that restores pre-PL 90 rate reviews for the individual market, said he was still upset about the process in which PL 90 was passed. He said rate reviews previously kicked in when insurance companies requested more than a 5 percent hike.
“I thought it was done totally distastefully,” Patrick said. “I think this bill was pounded through. Yeah, it is working for some, especially if you are young, but if you happen to be 55 to 59, I think it’s working bad, and if you happen to be in rural areas, you are also taking a pounding.”
Republican advocates of PL 90, however, said parts of the new law were still being implemented and that its convergence with the federal Affordable Care Act, which withstood a U.S. Supreme Court Challenge in 2010, made it difficult to determine precisely what was driving those higher premiums in Maine’s rural areas.
Others, including one of the chief authors of PL 90, Sen. Rod Whittemore, R-Skowhegan, said those angered over steep health-insurance-rate hikes were focusing their anger in the wrong place.
Prior to the hearings, Whittemore, the ranking Republican on the committee, said skyrocketing medical costs, coupled with the inefficient management of facilities and services, were more to blame for insurance-rate increases. Whittemore said more focus ought to be placed on ensuring providers were doing all they could to keep costs down.
Whittemore said the rate reviews under the old law took too long and were often so delayed that by the time they were approved they were outdated, which meant the next hike would be even steeper. “They came in pretty big chunks,” he said.
“By allowing this 10 percent rule, the rates come more frequently, as they need to relevant to the cost of health care as it continues to rise at an uncontrolled rate,” Whittemore said. He said anything over a 10 percent hike still goes to public review.
“To repeal current law would be a real loss to the citizens of this state,” Whittemore said.
He and other supporters of PL 90 can show rate increases since the new law went into effect have, in fact, been smaller, but opponents say more increases, closer together and without oversight, is a bad trend for health-insurance consumers.
Others going to bat against rolling back PL 90 provisions included lobbyists from Maine’s largest health insurance providers, Cigna and Aetna.
They argued against changes that would create one so-called geographical band for Maine, a proposal being sponsored by Sen. Geoff Gratwick, D-Bangor, Senate co-chairman of the committee.
Currently, the state has four rate bands, with a different rate for each. State law allows insurers to charge as much as three times the premium rate in some parts of the state, compared to others.
Advocates for one rate band, which is the language in another bill, said that change would mean all state residents were treated fairly and the higher costs of older and more rural populations would be spread out evenly.
But insurance companies and even a health care provider, MaineHealth, which operates the largest hospital system in Maine, said that would provide no incentive for rural providers to find efficiencies and reduce health care costs.
“The bills before you would remove, from our perspective, the very important financial incentive for health care systems to become more efficient,” said Katie Harris, vice president for employer and government relations at MaineHealth.
The committee is expected to continue hearing bills on the topic next week, House co-chairwoman Rep. Sharon Treat, D-Hallowell, said during a break Thursday.
Without strong Republican support, it is unlikely any of the measures proposed would survive a veto by Republican Gov. Paul LePage. LePage has been a proponent of the reforms in PL 90.