LD 1333 will make health care insurance affordable in Maine

By Craig R. Green
    Finally after over a decade of health care costs spiraling upwards and insurance companies leaving the state one by one, we finally have an opportunity to begin the process of reforming our over regulated market place.
    LD 1333 has arrived in Augusta to modify some of the laws passed under the watch of the Democratic Party and John Martin while he was Speaker of the House. During their reign a number of laws were passed to regulate the market place in Maine with the goal of protecting our citizens’ best interests. A lofty and good goal, but a very bad choice of initiatives.
    One such law was when the legislature passed a rating tier of 1.5:1. This means that when an insurer is proposing rates the least expensive person rated can only have a rate 1.5 times less than the most expensive person rated and vice versa. In theory, this sounds good making everyone’s price about the same. Here is why it failed.
    As rates went up over the past decade younger healthier people began to drop policies that they viewed as not necessary, but older and sicker people kept theirs in place. Once the average age of the insured population rose to be made up of mostly the 50-plus age group, the cost of insuring that group became the weighted average, or the rate on which the “rating tier” would be applied. At this point almost every younger healthy person dropped their coverage because the cost could only legally be 1.5 times less than the average.
    In today’s dollars the average is over $600 per month for a $5,000 deductible health plan, and the least expensive is $400, which no 20 to 30 year old can afford. It has caused a spiral of escalating costs which will only get worse.
    Even the Obama health plan has toyed with a 4:1 or 5:1 tier, knowing that the youngest insured’s are almost totally profit for a health plan and that they will only participate in the plan if charged a reasonable rate. Under the Obama plan rules, a 20 to 30 year old could cost $125 to $150 under Maine’s current circumstances and the most expensive older insured’s would likely be $625. This is basing the price on the older average age here in Maine. Once the younger population re-enters the market the average age will drop also reducing the oldest and sickest members’ premiums.
    Competition and younger insureds participating will do more to reduce everyone’s premiums than almost any other factor.
    So you may ask why I am writing about this law enacted a decade ago, well it is because LD 1333, an act before the Legislature and soon to be sent to the Senate, will raise the 1.5:1 tier to a 3:1 tier. This will again make it affordable for young people to buy health insurance and re-enter the market, reducing everyone’s cost. We must pass this bill to begin fixing the disaster that is called health insurance here in Maine.
    In the last two weeks, John Martin threatened the Aroostook County legislators not to vote for this act, while they were debating it on the House floor. By his and the Democratic caucus’ actions on the floor they prove that they are totally out of touch with the “County” people who I see every day, who cannot afford to pay $400 to $600 per person per month for a policy. Especially, when I know that states that are doing it right, like Virginia, have much better policies at much lower premiums.
    Anthem, our lone provider of individual health insurance here in Maine also does business in Virginia. A 30 to 40 year old in Maine will pay $400 per month to have a $5,000 deductible from them, where a Virginian will pay $190 a month for a $300 deductible, or $126 for the same $5,000 plan we have here.
    Mr. Martin and other opposing members should please come clean, and explain if you can, why we need to pay 4 to 5 times the costs of Virginia. Your caucus has tried to say that out-of-state plans are not to our standards and will compromise our health. Virginia is not a Third World country with exaggerated death rates, nor do they have an unregulated health market place. The fact is that it is the same company doing business here that is selling policies there at a much lower cost, why? Regulation!
    The time for smoke and mirrors, and scare tactics has passed. No more back room deals and telling the citizens of Maine that you know best. It is time to replace old and unworkable laws and legislators.
    I urge anyone who either pays for health insurance or can’t afford it, to call your representatives and urge tell them that you support the passage of LD 1333 and that further initiatives like this one based on the plans of states that have successfully navigated through the health cost issues are to be enacted as soon as is possible. We cannot wait any longer to reform our system.
    Craig R Green of Presque Isle has been an insurance agent for 15 years in Aroostook County.