March 24, 2018
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Market or Regulation Best for Insurance Fairness?

At its core, the debate about health insurance reform — both in Maine and in Washington — is about whether the government or private corporations will best protect business and individual interests. Are state and federal regulations the right solution? Or is market competition the best approach? This week, The Maine Debate has asked proponents of both approaches to join the discussion.

Joel Allumbaugh, president of the Maine Association of Health Underwriters:

“Lowering health care costs must start with the recognition that health care and health insurance are not the same, nor do they operate on the same principles. Government approaches often fail to make this distinction and damage insurance markets as a result.

In the pursuit of fairness we fail to allow insurers to appropriately rate risk. In fear of excessive profits we fail to allow insurers freedom to effectively manage costs. Competition is the best regulator of profits. Competition also leads to better products and efficiency.

This principle unleashed in the health care market will drive hospitals and doctors to meet the needs of patients. At the same time, patients’ ability to effectively associate medical services with their true cost creates incentives for healthy behaviors and conscientious health care spending. Government solutions simply promote greater disconnect between patients and health care resulting in inefficiencies and higher costs.”

Garrett Martin, associate director of the Maine Center for Economic Policy:

“By definition the government’s primary role is to represent the public’s interest. Insurance companies’ primary concern is profit. Government plays a very important role in balancing the playing field among insurance companies, health care providers and consumers. Ideally this supports greater alignment of interests and incentives to support a more open, transparent and competitive system that results in more cost-effective and higher-quality care.


“For many years federal law has allocated to states the responsibility to make sure insurers actually remain solvent and pay claims they owe. Government also plays an important role in mediating how the costs of care for those who lack sufficient coverage or are unable to pay for care are borne across society. Ultimately insurance companies and government have a shared interest in spreading risk as broadly and as cost effectively as possible.”


Mr. Allumbaugh and Mr. Martin will be online live from 10 a.m. to noon Tuesday. Join us on the Bangor Daily News Opinion page to be part of the debate.

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