Fourth quarter 2012 numbers are out; rate payers win big
AUGUSTA – Health insurance premium numbers for the fourth quarter of 2012 are out, and they bring good news for Mainers with private insurance policies. Click here for charts distributed by the Bureau of Insurance before the Legislature’s Insurance and Financial Services Committee yesterday.
In the fourth quarter of 2010, before the enactment of PL 90 by Republican legislators, 2.9 percent of businesses saw their health insurance premiums go down. In Q4 2011, the first quarter of PL 90 implementation, that number increased to 9.2 percent. Now, recently released numbers show that 17.5 percent of Maine businesses received a rate decrease in Q4 2012—a six-fold increase from before the Republican health insurance reform bill.
Equally noteworthy is the sharp decline in large rate increases. While 9.2 percent of businesses saw rate increases in excess of 40 percent in Q4 2010, the Republican health insurance reform cut that number in half, to 4.4 percent, in Q4 2012.
“Some of my Democratic colleagues have said they want to change the law, but in light of the numbers we’re beginning to see as the reform takes effect, we need to be careful about altering this new reform before its potential benefits have been realized,” said Rep. Joyce Fitzpatrick (R-Houlton), Republican Lead on the Legislature’s Insurance and Financial Services Committee. “The last thing we need is to go back to the enormous rate increases of the past.”
New data also show that policyholders in northern and eastern Maine are beginning to see decreases after lagging initially in the wake of the reform bill, and more consumers are moving toward individual policies, which are being offered at lower rates.
“This is really great news, and it shows that, with time, the reforms we enacted in 2011 have lowered premiums for most Mainers and set us on a course to enjoy the low rates that are so common in other states,” said Assistant House Republican Leader Alexander Willette (R-Mapleton). “Those in Aroostook County where I’m from have been slower to see the positive effects, but I’m especially encouraged by these numbers, which show the lower rates coming to northern and eastern Maine.”
Despite criticism from the left of PL 90’s changes to the rate review process, the Obama Administration’s Department of Health and Human Services applauded the rate review process established by the LePage Administration and PL 90 (see letters here and here). The most notable change to rate review was the elimination of intervenor status by outside groups such as Consumers for Affordable Healthcare and the Maine People’s Alliance. The Bureau is perfectly capable of reviewing rates without help from political activists.
Recent complaints also about the Maine Guaranteed Access Reinsurance Association (MGARA) have centered on its closed-door proceedings. The MGARA is not a government agency, but a private association of insurers established for the purpose of sharing risk. The Legislature established it as a private association in order to prevent its funds from being raided by state government. Furthermore, the Superintendent of Insurance not only has the authority to audit MGARA at any time, but appoints most of its members, in contrast to most states where insurers appoint the majority of members to similar associations.
Critics of PL 90 cannot counter the fact that the health insurance reform is lowering rates dramatically throughout the state, and Mainers are finally getting respite from the dramatic rate increases that previously plagued them under Maine’s old, heavily-regulated health insurance apparatus.