Less than two years into its implementation, the Republican-led health care insurance reform, known as Public Law 90, is helping stem rate increases for Maine individuals and businesses. But despite evidence of the law’s benefit, Democrats in Augusta and activists on the left are waging a campaign against what they have pejoratively dubbed “the rate hike law.”
In the decade prior to PL 90, the typical small-group and individual rate payer in Maine saw average annual increases of 17 and 13 percent, respectively. By comparison, recent rate increases have averaged just 11 percent in the small-group market and 1.7 percent for individuals, according to new information from the Maine Bureau of Insurance.
An Act to Improve Health Insurance Transparency (LD 102), introduced by Adam Goode (D-Bangor), would repeal changes to the rate review process instituted by Republicans and return to the pre-PL 90 statutory process for advance review and prior approval of individual health insurance rates.
Prior to PL 90, all rate increases in the individual market were subject to public hearings, often lasting a year or more, and the lengthy review process caused insurance companies to aim for higher increases because they could not adequately predict distant market conditions or the outcome of hearings.
“Before PL 90 the rate review process was arduous and expensive, and the higher costs were always passed along to consumers,” said Jonathan B. McKane, a former Republican representative of Newcastle. “The old process did nothing to keep rates in check,” he said.
“What we’re seeing now is the genius of the free-market at work,” said McKane.
Dan Bernier, a Waterville-based attorney who helped write the law, said reforms the Democrats are pushing would increase costs while doing little to improve the quality of coverage.
“It’s absurd to argue that the Maine Bureau of Insurance needs outside help with rate review,” said Bernier.
Bernier said under the old process outside advocacy groups would file interveners to get involved in rate review hearings, which often resulted in insurers being forced to cover the groups’ legal fees – costs that were then passed along to rate payers.
Goode’s legislation would also open the proceedings of the Maine Guaranteed Access Reinsurance Association (MGARA), the reinsurance program established by PL 90 for the high-risk segment of Maine’s health insurance market, to citizens and activists as provided in the Freedom of Access Act.
Sen. Geoff Gratwick (D-Bangor), a co-sponsor of Goode’s legislation, is wary of MGARA.
Gratwick, a medical doctor practicing in Bangor, said LD 102 will force the Superintendent of the Bureau of Insurance to deliver audits of MGARA to the legislature and the public. “I have several questions about MGARA board members’ relationships with the three major insurers,” he said.
Unlike other states’ pools, where boards are comprised mostly of officials from insurance companies, the Superintendent of the Bureau of Insurance appoints the majority of MGARA’s board – an aspect of the law designed intentionally to avoid suspicions like Gratwick’s.
Skeptics of PL 90 have also pointed to contact information on the MGARA’s website which lists an address in Idaho – a fact some believe justifies calls for greater transparency.
But like all risk pools, MGARA is run by a corporate administrator, and the board decided to hire the same company that runs the Idaho pool.
“Given their experience and record with the Idaho pool, that was an excellent decision by the MGARA board,” said Bernier.
Bernier added that extending the Freedom of Access rule to a private corporation such as MGARA would open the window to further encroachments into the operations of many large businesses in Maine. “It would set a very dangerous precedent,” he said.
Although Democrats in Augusta are not satisfied with the rate review process set up by PL 90, federal regulators in the Obama administration are.
The Center for Consumer Information and Insurance Oversight (CCIIO) reviewed the law shortly after its passage in May of 2011, concluding PL 90 established an effective rate review process.
In a letter to Maine Bureau of Insurance Superintendent Eric A. Cioppa dated July 1, 2011, CCIIO Director Steve Larsen said, “We applaud your efforts to provide an effective rate review program for your State’s insurance consumers that meet the criteria outlined in the Affordable Care Act.”
In a second letter dated October 19, 2011, Larsen said, “We applaud your efforts to provide your State’s insurance consumers with an Effective Rate Review Program for association coverage and we encourage all States to continue their efforts to ensure that rates charged to health insurance consumers in their State are reasonable.”
So if PL 90 is lowering rates and receiving so much applause from federal bureaucrats, why aren’t Democrats and leftist groups cheering?
Perhaps because PL 90 eliminated consumer advocate groups from the rate review process, including the leftist Maine People’s Alliance (MPA) and its partner Consumers for Affordable Health Care (CAHC). Both groups have long advocated for single-payer, government-run health insurance.
According to data at MaineOpenGov.org, CAHC has received more than $1.1 million from taxpayers since 2007 for consultation and public education services. This figure includes $160,000 from an August 2010 federal grant intended to support rate review.
But since PL 90, CAHC not been able to obtain public funding for its intervention in the rate review process.
According to multiple sources in Augusta, Gov. Paul LePage axed more than $350,000 in funding originally intended for CAHC. Many see the latest round of Democrat-backed bills as a way to bring groups like CAHC back into the rate review process.
“Consumers for Affordable Health Care has no interest in improving the private health insurance market or ensuring it works for hard-working Maine people,” said Maine GOP Chairman Rich Cebra.
“Their goal is, and has always been, to force a complete government takeover of healthcare and they will work to disrupt any effort to make the private health insurance market work for Maine people,” he said.
“This exposes their real goal, they don’t want affordable health insurance for the Maine people – they want government control over the healthcare of the Maine people.”
Several calls placed to Consumers for Affordable Health Care were not returned.