What A Deal
Remarks from Rep. Sharon Treat, D-Hallowell, on LD 1333
It was such a great deal…. until the wheels fell off!
I’m reminded of the hard sell some used car salesmen are famous for. There’s this beautiful little cream-puff used car, sure, its got a few miles on it, but doesn’t it look sweet on the lot? It’s Spring in Maine, so we can be whimsical. Let’s make that sweet little car a two-seat convertible, we can dream, right?
So the first thing the savvy salesman does is get you behind the wheel driving that sweet little car, the wind’s in your hair. You want it! You need it now! So it’s right to the deal. Comparison shopping? Investigating under the hood? What about all the research you were going to do in Consumer Reports on the maintenance record for this model? No, you need to have it now, or someone else will scoop up this once-in-a lifetime deal. So you plunk down your money and drive it off the lot in a hurry.
And all goes well until the wheels fall off.
LD 1333 is that car, and the way the Majority of the Insurance & Financial Services Committee handled the committee process is that negotiation. LD 1333 was rushed off the lot so fast the bondo patching wasn’t even dry. And unfortunately, the consequences of this bad deal won’t merely affect one ripped-off car consumer, but every insurance purchaser in the State of Maine.
LD 1333 promises a lot, but it can’t deliver on its promises, and in the process a lot of people, especially in rural Maine, will lose the insurance they have because they simply won’t be able to afford the price increases.
Sure, some people will get a price break. The Bureau of Insurance says the scheme in LD 1333 will lower the statewide average cost of health insurance by three percent. If you are a young healthy guy in Southern Maine, your rates could go down much more than that. But if you live in Central, Eastern or Northern Maine, watch out– especially is you are middle-aged, 48 years old and up. And that, friends, is a lot of us, because Maine is the state with the oldest population anywhere.
Just how much will your insurance go up?
According to a Bureau of Insurance memo we received AFTER the committee vote, the changes next year will result in:
- 14.9% of the Individual Market will see an average rate increase of 29.9%
- 42% will receive premium increases of some amount; the average age of the policyholders who will see rate hikes is age 48
- Maine people living in the North will experience on average a 19% rate increase
- Maine people living in Down East will experience a 22% rate increase
- Maine people who want to keep the insurance policy they currently have will see price increases rise as high as 170 percent over the next 3 years.
And these increases don’t even account for the $48 dollar per head annual tax ($292 for a family of four) on anyone who buys health insurance. So the big promise of more affordable insurance just isn’t going to pan out.
By the way, these rate hikes are based on the 3:1 ratio between the lowest allowable rate and the highest rate that LD 1333 begins in 2012, not the more drastic 4:1 and 5:1 ratios the bill plans for 2014 and beyond. But, hey, those are already illegal under federal law, so maybe we shouldn’t get too worried!
Did I mention, the bill allows insurers to charge an infinite amount more based solely on where you live?
So what else will this bill do?
Health tracking. It allows the insurance companies to identify the people it wants to fill out a special health status questionnaire so it can track their claims separately. Combined with changes to the law that allow insurers to change prior authorization conditions whenever they want, opening the door to huge abuses and claims denials for cancer patients and others with high medical costs.
Mandates. Although proponents say LD 1333 keeps all the mandates, such as pregnancy coverage, chiropractic and mental health services, it actually allows businesses to band together and offer insurance that doesn’t include the mandates.
Making health care inaccessible. Insurers could make you drive from Fort Kent to Kittery to get your weekly cancer treatments.
Gets rid of health planning and costs and quality initiatives. Apparently, the theory is these aren’t needed because the freed-up marketplace will police itself. Right.
Backs up its promises with out of date, irrelevant data. There is a lot to be said for a properly designed reinsurance program. Unfortunately, LD 1333 bases the level of the health care tax and premium assessment to fund it on data from Idaho where medical costs are $2,000 less per person. This matters a lot, because if the LD 1333 guesses wrong, there are only two options—either your taxes go up to pay the difference, or caps, deductibles and claims denials will be put in place, resulting in second-class health care for the chronically ill and those with pre-existing conditions.
The Majority Report on LD 1333 isn’t ready for prime time. We all agree that double-digit increases in health insurance premiums are unsustainable for our businesses and families.
- LD 1333 picks winners and losers.
- It lowers rates for some at the expense of many.
- It pits North against South, the middle-aged against the young.
- It imposes a new tax on health policies without doing the math about how much money is going to be needed.
- It will delay access to health care treatment.
Working together, we could have come up with a thoughtful, Maine-based plan to lower health costs and insurance premiums. This isn’t that plan, and I ask you to oppose the Majority Report.