By Joel Allumbaugh
Consumers for Affordable Health Care, a Maine advocacy group that promotes government-run health care coverage, is trying to pin the results of decades of bad insurance regulations on Public Law 90, the first market-based effort to dig us out of the incredible hole we find ourselves in.
A press release about CAHC’s new report, “Few Winners, Many Losers: Evaluating the Impact of Key Provisions of Maine’s New Health Insurance Law To Date,” offers five misleading bullet points to summarize the report.
First, CAHC points to the fact that 54% of individual policyholders saw higher premiums. But they failed to mention that nearly 100% of individual policyholders have seen increases in recent years prior to PL90.
CAHC also fails to mention that about 87% of individual policyholders have access to lower-cost alternative products as a direct result of PL90.
Second, CAHC claims the “overwhelming majority” of small business (90%) saw increases, but fails to offer any perspective. Prior to PL90, almost all (approximately 97%) of small businesses experienced rate increases.
Companies receiving decreases rose from near 3% to 10%, an increase of 300%. This is a significant swing in the right direction, especially given that only a small portion of PL90’s regulatory changes have taken effect.
Third, the CAHC describes “worsened product choices” in the individual market, which is a completely subjective statement. As an insurance consultant, I have analyzed the new individual products and have determined that they will provide better coverage for many of my clients.
Whether a product is “worse” is entirely a function of a person’s individual medical needs and risks.
Anthem has also announced a new individual product that covers maternity care, combines the medical and pharmacy out-of-pocket limits and is compatible with a tax-free Health Savings Account. This product choice would not be a reality without PL90.
Fourth, the CAHC describes higher taxes ($22 million) on all insured for a reinsurance program to “support higher profits” for insurers. They fail to mention that the “tax” is an assessment that has resulted in lower individual premiums; that the Dirigo assessment was twice as large with no quantifiable reduction in premiums; and that the Dirigo assessment is phasing out, which will result in a net decrease in total assessments for all policyholders.
They also fail to reference the medical loss ratio (MLR) laws under PL90, which mandated an increase in the percentage of premiums insurers are required to spend on medical care. Insurers are also required to pay a hefty premium when they access the reinsurance program, another fact conveniently omitted from the CAHC report.
Fifth, the CAHC describes “weakened consumer protections” based on the changes to Maine’s rate review process. They fail to mention that Maine simply adopted the standards under the federal Affordable Care Act—which CAHC enthusiastically supports.
The CAHC also fails to mention the negative impacts of the prior rate review process and assume that it created a beneficial result. These assumptions are easily challenged.
The fact is that PL90 has already helped to lower insurance premiums for many small businesses and individuals. Several reforms in PL90 have yet to fully materialize, but they will bring much-needed relief to Maine’s insurance market.
Joel Allumbaugh is director of the Center for Health Reform Initiatives at The Maine Heritage Policy Center. He is also CEO of National Worksite Benefit Group, Inc., a full-service employee benefits insurance agency specializing in consumer-driven health plan strategies.