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October 3, 2011 Public Engagement

A stacked deck or an honest deal for Maine?

By Garrett Martin

Anyone who has seen an old Western recognizes this scene: A group of cowboys sits in a bar playing poker. When it matters most, the dealer keeps winning. More often than not, the dealer gets caught stacking the deck. Other times, he takes his money and heads for the hills.

Today, the deck is increasingly stacked against those trying to find affordable health insurance in Maine. Only this is not a game and the consequences could be lasting and significant for a wide range of people and businesses. Access to basic information about our health insurance purchasing options is at issue. So, too, is our ability to hold health insurance companies accountable and to identify the best possible health care solutions.

Who's stacking Maine's health care deck?

Starting in 2014, states will implement "one-stop" health insurance exchanges through which individuals and businesses can save time and money by comparing and purchasing health insurance from a standard menu of products. The governor and Legislature of each state will design their state's exchange and decide who has a say in the process. Given this opportunity, it makes sense to ensure that consumer voices are well represented and that insurance companies and brokers don't unduly influence the process.

Unfortunately, the opposite is happening here in Maine. For proof, look no further than the Advisory Committee on Maine's Health Insurance Exchange appointed by Gov. Paul LePage. Insurance agents and insurance companies dominated the process while consumer advocates were noticeably absent. Certainly, insurance agents and companies should be at the table, but the process must balance their concerns and interests with those of families and small businesses that stand to benefit most from a well-executed exchange.

The Legislature must restore balance to ensure that consumers aren't getting a bad deal in the development of Maine's health insurance exchange.

Insurers hold all the aces

Maine's recently passed health insurance "reform" law, LD 1333, is another example of vested interests stacking the deck against Maine consumers. This law gives more power and profits to insurance companies in two specific ways.

First, the new insurance law subsidizes insurers' risks in the individual market by levying a fee on insurance policies in both the individual and small group market and distributing the money among insurance companies. Who decides how these funds are ultimately distributed? An 11-member board, five of whom are appointed by insurers — talk about stacking the deck.

Second, the new insurance law takes away a proven, effective tool for curbing increases in individual health insurance costs. In the past, the Bureau of Insurance had the authority to review and rule on all rate increases in the individual insurance market. The new health insurance law takes away this authority for all annual rate increases less than 10%. Anthem recently proposed a 9.7% increase in individual rates, but after detailed review, the Bureau of Insurance limited the increase to 5.2%, a much better outcome for consumers. The new law leaves consumers little recourse and Anthem's rates would have gone up 9.7%. In poker terms, the house wins again.

It's not too late

Recent events indicate we're not addressing the real cost drivers in our health care system. These include poor chronic disease management, wide variation in the cost and quality of care, and inefficiencies within the existing health system, such as relying on emergency rooms instead of basic preventive care or using high-cost screening tools or medications over readily available, less expensive options. Maine policymakers' current approach creates winners and losers rather than shared solutions that work for all.

To get back on track, the LePage administration can work with the Legislature to promote core principles of good governance: conduct business in an open, transparent manner; avoid conflicts of interest through clear accountability; and strike a better balance among interest groups to ensure fairness and greater participation.

A good first step would be reinstating the Advisory Council on Health Systems Development to inform discussions about the health insurance exchange and continue their work on health systems reform. A second step would be to reinstitute the individual market rate review process, revisiting the design and oversight of the guaranteed reinsurance program, and calling on the Bureau of Insurance to rigorously monitor and report on the impacts of the new law's many provisions, particularly on small businesses statewide.

Government should ensure that we live in a civil society with a level playing field. Stacking the regulatory deck threatens the access of thousands of Mainers to quality, affordable health care coverage. An honest deal will do more to assure fairness and control costs for Maine families and small businesses.

Garrett Martin, associate director of the Maine Center for Economic Policy, will become executive director later this month. He can be reached at gmartin@mecep.org. Read more Public Engagement here.

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