Maine should start planning for health law

With the long-awaited U.S. Supreme Court decision on the federal health care law behind us, Maine should resume laying the groundwork for the next step required under the law: health insurance exchanges.

That, however, will require Gov. Paul LePage to put aside his aversion to the new law and make sure Maine is ready to meet important deadlines.

The exchanges could provide a free-market solution to health care affordability in Maine.

To be clear, Maine has a relatively low percentage of uninsured residents, about 14 percent of those between 19 and 64 in 2010, according to the Kaiser Family Foundation. In Texas, the rate for the same age bracket is 33 percent, while the U.S. average is 22 percent.

Still, in Maine, that leaves well over 100,000 people between 19 and 64 without health insurance.

Research shows that people without health insurance are 40 percent more likely to die than those who have it. They wait longer to receive care and medical problems are more often detected when they are difficult or impossible to successfully treat.

Even when life-threatening problems are detected, those without health insurance are more likely to receive spotty or inconsistent care.

Estimates vary, but as many as 45,000 people die each year from problems that would have been detected and successfully treated if they had health care insurance.

The health insurance exchanges will provide a searchable marketplace for health insurance.

Companies will compete to provide policies to individuals and small businesses. Families with incomes between 133 percent and 400 percent of the federal poverty level will receive federal income tax subsidies to make the insurance more affordable.

But there is a deadline. By Nov. 16, states must tell the federal government whether they plan to set up their own exchanges by Jan. 1, 2014.

If states decide not to set up exchanges, the federal government will set them up for them.

Maine was well on the way to using federal grants to meet the exchange requirements until Republicans came to power in Augusta.

Gov. Paul LePage stopped the preparatory work as the state's attorney general joined other states asking the Supreme Court to declare the law unconstitutional.

That effort failed last week when a majority of justices found the most controversial provision of the law, a mandate to obtain health insurance, constitutional.

Some states are now arguing that they will not plan for the new law hoping for two results in the November elections: A Republican president and a Republican majority.

With deadlines looming, Maine should proceed with planning rather than take that gamble, especially since the federal government seems willing to invest even more in the planning process.

Maine could then be ready with a coherent, workable plan that moves more Mainers out of limbo and into a health insurance plan.

rrhoades@sunjournal.com

The opinions expressed in this column reflect the views of the ownership and the editorial board.

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Comments

CLAIRE GAMACHE's picture

Addressing the cost of health care

The charge has been made that ACA does not address the ever rising cost of health care. What are we doing now to address the ever rising cost? Is letting people die from lack of care the solution? In Massachusetts, they are working on that now. They can do it because everyone has insurance. The same will happen eventually for ACA. The Republicans in Congress forced the removal of a provision for helping people write end of life directives. They called it "Death Panels". Personally I have a directive that in the event of a terminal illness, I don't want extraordinary measures (which I spelled out) I just want pain killers and an easy ride home. The last year of a person's life is the most expensive according to the insurance companies. Many people suffer through treatments and operations that they may not even want because they have left no directives. One way to control costs will be to put this provision back in. Preventive care will also work to that end especially in maternity cases. Eventually I think we will also be looking at tort reform as a way to cut costs. In any case ACA opens many possibilities for cutting costs that do not exist now.

CLAIRE GAMACHE's picture

Today is the day

Today is the day that the part of ACA that kicks in concerns the rule that insurance companies must spend 80% of the premiums they charge on health care rather than on marketing or outrageous CEO salaries. If they charge more they have to refund the balance. In my opinion the billions spent by the insurance lobbies to bribe our legislators are probably related to this one provision. It's nothing new though. The utility companies are also prohibited from unduly abusing their customers. Plus in return for this insurance companies are getting a slew of new insurers.I hear that Maine is one of the states that will be receiving the largest refunds. It will be interesting to see how it works out.

 's picture

Ok Claire, I am impressed

Ok Claire, I am impressed with your honesty. It is good to know that you would not change from your cadillac plan.

CLAIRE GAMACHE's picture

Taxes on cadillac plans

Did you notice in an article in today' s paper it states that cadillac plans will be taxed in order to help pay for ACA? I'm not worried though. I don't exactly have the Michael Jackson plan, I have Medicare plus supplement. I'll be surprised if that's the cadillac plan they are referring to. However, compared to the terrible plans some friends are getting from their employers mine is golden.

MARK GRAVEL's picture

Claire, Another discontinuity

Claire,
Another discontinuity in your view is that the individual mandate suffers the same fate as Medicare and Social Security.

What is that? The changing demographics in this county will put an ever larger economic burden on the young. In other words, there will be fewer people paying for the benefits of an ever growing aging population. A Ponzi scam.

It is refreshing to talk with some 18-20 year olds that grasp this concept, while other older more educated individuals struggle with the concept. The younger generation gets it because they are paying for it today, and they don’t like it.

CLAIRE GAMACHE's picture

I heard differently

Last week I came across a survey that said that America was growing younger due to immigration compared to Europe, Japan and China which are growing older. Perhaps your demographic refers to Maine which is growing older. All the more reason to form an insurance pool which can join with another pool from a state with younger demographics.

MARK GRAVEL's picture

Simply not true, but you

Simply not true, but you already know that to be the case. Moreover, ObamaCare, Medicare, and Social Security does not apply to Europe, Japan, and China, so you are just mudding the discussion.

"The Changing Age Profile—The United States Is Getting Older"

“...the United States has been in the midst of a
profound demographic change: rapid population aging...”

Ref:: http://www.fas.org/sgp/crs/misc/RL32701.pdf

 's picture

Joanne, Romneycare is NOT

Joanne, Romneycare is NOT working. It is an utter failure.

CLAIRE GAMACHE's picture

Not so

According to the latest polls 60% of the folks in Massachusetts like it. In this political environment you couldn't get 60% favorablility on milk let alone a taxpayer funded program. I call that a success especially since they are still in the process of refining it.

MARK GRAVEL's picture

Claire, For comparison, can

Claire,

For comparison, can you please cite National poll numbers of Americans that dislike ObummerCare for a balanced comparison?

Headline: “NY Times, CBS Bury Own Poll on ObamaCare; Times Plays Up Declining Prestige of SCOTUS”

Why bury the results Claire?

Claire, Massachusetts does not necessary reflect the view of all Americans, but you already know that.

CLAIRE GAMACHE's picture

Balanced

Every time I hear that word from a Republican I have to wonder if they've ever seen a dictionary. Most Americans are not familiar with ACA and what it will do. They have heard a lot of hysteria and misinformation promulgated by people owned lock stock and barrel by the insurance companies who prefer to continue their abuses.When people learn what the law will do they often change their minds. The folks in Massachusetts, however, know the law and have lived with it for a couple of years. I don't think the two balance out at all. Fear and hysteria does not equal knowledge and experience unless you consider opinion more reliable than or even equal to fact.

MARK GRAVEL's picture

What word Claire, I wrote

What word Claire, I wrote several?

If you’re talking about “SCOTUS” that is part of a quoted title.

You need to be clearer – “that word”, what word?

As for ObummerCare, everyone that gets better service than they currently have like it. Everyone how has to pay more for others to have better service hate it.

I personally know two Doctors who will stop servicing Medicare patients because of this Medicare expansion portion of the law. They simply don’t get reimbursed enough to deal with Medicare patients.

Zack Lenhert's picture

"You need to be clearer –

"You need to be clearer – “that word”, what word?" The word is "BALANCED". It's in her subject line.

"I personally know two Doctors who will stop servicing Medicare patients because of this Medicare expansion portion of the law" - Scare tactics, I've heard this threat over and over and still don't believe it will happen to a great extent. What is their business plan for replacing that income? If they drop them someone else will pick them up.

MARK GRAVEL's picture

You can call it scare tactics

You can call it scare tactics if you wish, but it has already happened. My two acquaintances will not take a new patient if they are a Medicare patient.

“What is their business plan for replacing that income?” There are plenty of paying patients; they both do very well.

“If they drop them someone else will pick them up.” Perhaps, but what you’ll see happening is a two tier system develop. There will be some business that specialize on Medicare patients; however, to make a profit, these offices have to move a large volume of patients through the examine room. That will decrease the quality of care for these patients.

All this is simple economics. If you make less profit per unit, you need to move more units.

Zack Lenhert's picture

Doesn't sound like socialism

Doesn't sound like socialism to me.

 's picture

Claire, now that this has

Claire, now that this has been upheld, are you willing to switch your taxpayer funded Cadillac plan to the Obamacare plan. Just a simple "Yes" or "no" will suffice.

CLAIRE GAMACHE's picture

No

But I am happy to see all those folks struggling with insurance issues to join me.

MARK GRAVEL's picture

Join you at whose expense?

Join you at whose expense? I’m befuddled that these comments never address who will pay the bill!

CLAIRE GAMACHE's picture

About the young and healthy

The young and healthy are not immune to accidents and most of all they are not immune to having a sick baby. With ACA they can be assured their baby will be covered by insurance and they won't lose their house and life savings trying to keep it alive. Another fact of life; the young and healthy in time become old and sick for the most part. I have a family member who paid for health insurance his entire adult life and never collected anything near his premium. In old age he had open heart surgery with complications which came to over a million dollars. That's how health insurance works.

MARK GRAVEL's picture

“The young and healthy are

“The young and healthy are not immune to accidents.”

The young and healthy are in a much lower risk pool than seniors, so they need much less insurance, such as a catastrophic policy verses something much more expensive.

As I stated earlier, the young are becoming aware of the financial burdens this generation is leaving them. I look to this young generation to help throwback the entitlement state.

Let me leave the readings, who think healthcare is a right, with this parting thought. An intrinsic right, such as the right to liberty, does not require taking rights from others. To elevate healthcare to a right means you have to take money from someone else to pay for it. That is not an attribute of an intrinsic right.

CLAIRE GAMACHE's picture

The law changes nothing

We already have an intrinsic right to health care. That's why an ambulance will come and pick you up if you get hit by a truck and take you to the hospital and you will be treated without having to pay up front. If a baby is born with severe health issues we don't let it die because its parents can't pay. And if you and the baby can't pay you will get charity care the cost of which will be passed on to patients who have health insurance and they will pay through their premiums. ACA changes nothing of that. It only regulates how payment will occur and how much the insurance companies can charge for it. I will grant you getting this law off the ground will be expensive and is made more so by Republican efforts to sidestep it. If you compare it to the cost of 10 years of war in Iraq , however, it is a pittance. When you consider the price of freedom from fear of dying early from lack of quality medical care or of being sick and going bankrupt it is cheap. It's now how much it costs it's about what you are getting. What did we get for the trillions we spent in Iraq aside from freedom from those imaginary weapons of mass destruction.

MARK GRAVEL's picture

A couple quick responses

A couple quick responses before I go enjoy my independence Day.
1. Your example is not an intrinsic right by definitions because if one cannot pay, rights are taken away from others in the form of transferring there labor to pay for someone else.
2. Freedom has nothing to do with emotion. That is, having the lack of fear in your example. Moreover, you will never quash all human fear. In fact, fear can be a motivator. Like fear of having a heart attack can motivate an individual to be healthier.
3. You cannot escape the changing demographics, that along dooms ObummerCare along with Medicare and Social Security.

Cheers,
Better living through smaller government.

MARK GRAVEL's picture

The headline should read:

The headline should read:

Maine should Prepare to Reject ACA Medicare Expansion.

CLAIRE GAMACHE's picture

Insurance pools

This is the best part of ACA. It is a win win for both the consumer and the insurance companies. As a teacher I belong to a state wide health insurance pool and I can vouch for the benefits you get when you belong to a large pool. As an individual you might pay $900 a month for a so so policy. Exhorbitant to you but if you get cancer or heart surgery it could cost a million dollars. The insurance company loses money on you. In a large pool healthy people paying premiums mitigates the cost. Also when you combine that with preventive care which can save a lot of expensive medical care and near universal coverage which will severely reduce non-emergency visits to the emergency room and expensive charity care it is a win for the hospitals and they will be paid for their services in a timely manner. Best of all states can combine their pools with other states. We could for example have a New England pool. The larger the pool the more the insurance companies will compete for it and the less your health insurance will cost.

MARK GRAVEL's picture

This is not a win for the

This is not a win for the young and health that now must pay premiums for those in the pool that consume the resources. Moreover, the state or federal government could have created insurance pools without the individual mandate.

The real win is for the insurance companies who now have forced patronage and perhaps you who get the young generation to pay for your healthcare.

Well, we’ll see how that works out with changing demographics. However, I do have hope in the young generation. They are starting to become aware of the raw deal our government has given them – loads of debt. I look to them to provide the catalyst for change.

Betty Davies's picture

Bush created the "loads of debt"

He transformed a surplus into a huge federal deficit by 1) starting two ruinously expensive wars while 2) slashing revenue by giving tax breaks to millionaires.

He did this on purpose to manufacture a justification for cutting social services.

MARK GRAVEL's picture

What about those black

What about those black helicopters and the illuminati?

Don't forget Bush cut your taxes too. You'll see this in January if you have forgotten.

Betty Davies's picture

Billionaire tax breaks cost U.S. Treasury $11.6 million per hour

"Families earning more than $1 million a year saw their federal tax rates drop more sharply than any group in the country as a result of President Bush’s tax cuts, according to a new Congressional study." [http://www.nytimes.com/2007/01/08/washington/08tax.html]

"A distributional analysis of the 2001-08 tax changes shows that the top 1% of earners (making over $620,442) received 38% of the tax cuts. The lower 60% of filers (making less than $67,715) received less than 20% of the total benefit of Bush’s tax policies... the economic impact of cutting capital gains rates and lowering the top marginal tax rates never materialized for working families. Inflation-adjusted median weekly earnings fell by 2.3% during the 2002-07 economic expansion, which holds the distinction for being the worst economic expansion since World War II." [http://www.epi.org/publication/the_bush_tax_cuts_disproportionately_benefitted_the_wealthy/]

"Tax cuts for the wealthiest five percent of Americans cost the U.S. Treasury $11.6 million every hour, according to the National Priorities Project. America’s top earners will get an average tax cut of $66,384 in 2011, while the bottom 20 percent will get an average cut of $107." [http://www.huffingtonpost.com/2011/10/14/tax-cuts-for-wealthy-americans_n_1011601.html]

The money the American taxpayers are essentially handing over to billionaires was supposed to "trickle down" to the rest of us in the form of jobs. Hasn't happened. A failed policy.

MARK GRAVEL's picture

You always miss the most

You always miss the most important point. The money does not belong to the government in the first place!

There is plenty revenue flowing into the federal government even with the Bush tax cuts to provide a basic safety net. All the government needs to do is prioritize spending.

The truth behind the curtain is that some people what redistribution of income. In other words, they want something for nothing.

Zack Lenhert's picture

"for the young and health

"for the young and health that now must pay premiums for those in the pool that consume the resources"

Responsible young people are already paying premiums along with older generations, what has changed? I pay the same rate as the older gentleman sitting next to me, essentially subsidizing his insurance. THIS IS HOW INSURANCE WORKS! It's not like buying hamburgers at Wendy's.

Why is it OK not to have health insurance when it's proven that the uninsured population drives up costs for everyone else? It seems as though you are advocating that young people don't buy health insurance, how responsible is that?

MARK GRAVEL's picture

I’m not advocating the young

I’m not advocating the young people buy no insurance, but young people past the age of 18 are less likely to require healthcare services, so they don’t need and are not expected to draw on an extensive plan. As a young person, I purchased a catastrophic policy that covered me for major medical, but did not cover routine doctor’s visits. That is what I could afford.

Now the country is telling people what level of healthcare they must purchase because they have to pay for, say, you. That is good for you, but not for the payee.

Many younger are aware that they are being forced to pay for an aging population; they don’t think that as fare, and I agree with time. They see your generation leaving them a huge debt, depleting the SS trust fund, and now forcing them to buy more expensive health insurance policies than they normally would have simply to pay for…. you.

Lastly, the takeaway from the hamburger analogy is that the underlying cost of the hamburger (i.e. healthcare) does not change when you force more people to contribute into the hamburger pool. Moreover, the purchaser of the hamburger is benefiting from others who don’t get to eat the burger. Is that fair?

Zack Lenhert's picture

You also seem to be confused

You also seem to be confused of which generation I am from. Reagan was president when I was born, the debt had already begun to accrue.

MARK GRAVEL's picture

Perhaps you can clarify the

Perhaps you can clarify the significance of that statement for me?

When I was born, the debt had already begun to accrue, so XYZ.

XYZ = I don’t want to pay for someone else’s services?

XYZ= I love having debt, give me more?

Debt started to accruing since Woodrow Wilson was president, so I’m a bit confused trying to complete your thought.

Zack Lenhert's picture

To put it simply, the larger

To put it simply, the larger the insurance pool the lower the costs on average per enrollee. When hospitals are forced to treat people that don't have insurance it raises the cost of healthcare for everybody.

I also have the foresight to realize that one day I to will be old and will probably 'cost more' to insure. I hope then that the young won't mind 'subsidizing' my healthcare as I do now for everybody that is older than I and in the same insurance pool.

MARK GRAVEL's picture

First, while an insurance

First, while an insurance pool appears to lower the cost for the consumer, it does nothing to address the underlying cost of administrating care. Moreover, forcing insurers to provide more benefits, such as covering preexisting conditions or child coverage until 26 or contraception or the next mandate, will drive up costs for everyone.

Second, it is a natural human emotion to be afraid as we age and want to be taken care of. However, the changing demographics in this country, that is the aging of our population, will put an ever increasing financial burden on the younger generation. Is that fair so some of us don’t have to fear growing old?

The 18-25 year olds are finally awaking to this phenomenon and asking the necessary questions. Why should I pay into a system that I will not benefit from?

I look to this young generation to finally break this cycle of entitlements.

MARK GRAVEL's picture

First, while an insurance

First, while an insurance pool appears to lower the cost for the consumer, it does nothing to address the underlying cost of administrating care. Moreover, forcing insurers to provide more benefits, such as covering preexisting conditions or child coverage until 26 or contraception or the next mandate, will drive up costs for everyone.

Second, it is a natural human emotion to be afraid as we age and want to be taken care of. However, the changing demographics in this country, that is the aging of our population, will put an ever increasing financial burden on the younger generation. Is that fair so some of us don’t have to fear growing old?

The 18-25 year olds are finally awaking to this phenomenon and asking the necessary questions. Why should I pay into a system that I will not benefit from?

I look to this young generation to finally break this cycle of entitlements.

MARK GRAVEL's picture

First, while an insurance

First, while an insurance pool appears to lower the cost for the consumer, it does nothing to address the underlying cost of administrating care. Moreover, forcing insurers to provide more benefits, such as covering preexisting conditions or child coverage until 26 or contraception or the next mandate, will drive up costs for everyone.

Second, it is a natural human emotion to be afraid as we age and want to be taken care of. However, the changing demographics in this country, that is the aging of our population, will put an ever increasing financial burden on the younger generation. Is that fair so some of us don’t have to fear growing old?

The 18-25 year olds are finally awaking to this phenomenon and asking the necessary questions. Why should I pay into a system that I will not benefit from?

I look to this young generation is finally break this cycle of entitlements.

JOANNE MOORE's picture

Great post, Claire

Presidential hopeful, Mitt Romney did this in Massachusetts when he was governor. It worked. I have a cousin there and his insurance cost went down and he got more coverage.

One wonders why Mittens railed against basically the same plan for all of us. Oh wait. It was because it is a plan from the Obama administration. Kinda makes Romney look the fool. Again.

MARK GRAVEL's picture

The dirty little secret of

The dirty little secret of both plans is that they do nothing to contain the cost of healthcare.

How? Take for example that I buy a hamburger at Wendy’s for $10.00. Now I get you to pay for half of it by paying into the hamburger pool. Well, I may think I’m getting a bargain - $5.00 Hamburgers.
However, the hamburger still costs $10.00. I just get you to pay for half of it. See, there is no change in the underlying cost of healthcare, just an appearance of lower costs.

Now you say wow, $5.00 hamburgers, I’m going to get me some, and you start consuming hamburgers. Well, assume Wendy’s is still asking $10.00, the price you and I pay into the pool has to go up due to the increased consumption.

In closing, I can succinctly sum it up – there is no free lunch! Perhaps you feel content with taking someone else lunch for yourself; it is not right; it is not moral; it is not just.

MARK GRAVEL's picture

Economy of scale does not

Economy of scale does not apply to the current healthcare system or will it under Obamacare.

Economy of scale is only affective when there are a handful of vendors involved. For example, merging HP and Compaq PC lines gave HP economy of scale to buy PC components like CPUs and Hard drives. That was achievable since HP has only a handful of supplies to negotiate with.

There is currently a plurality of insurance vendors in the healthcare industry. That will not change with Obamacare. Moreover, there is a plurality of healthcare service provides. That said, the government has little negotiating power. Take how Medicare is administered today. The government does not have the resources to negotiate with thousands of healthcare providers. The only tool they have to reduce cost is to reduce reimbursements to services providers. That will not change under Obamacare, so economy of scale does not apply to Medicare services.

Lastly, reducing reimbursements will drive some doctors to not accept Medicare Patients since they can make more money providing service to insured patients.

I have provided you with a clear example why economy of scale is not applicable to healthcare under Obamacare.

Zack Lenhert's picture

economies of scale are the

economies of scale are the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased.

This perfectly applies to the insurance companies. More people will be buying insurance (expansion) and average cost per unit will fall.

This is pretty simple microeconomics

MARK GRAVEL's picture

Zack, That is not absolute,

Zack,
That is not absolute, especially when the insurance company cannot select the supply. I good example of this would be those existing plan where the policy holder can pick the doctor or there is a large network of doctors available to the policy holder. The insurance company has little leverage to negotiate prices.

This is what happens today. The only tool these insurance companies have to contain cost is through limiting reimbursements. This will not change since most Americans have health coverage today; new individuals added under ObummerCare are an overall small percentage of the pool of insured today. The net effect is that the bump in volume (i.e. people buying insurance) will be small as a percentage of existing volume in the system.

Limiting reimbursements will continue to be the most effective tool for an insurance company to contain cost.

You may be quoting microeconomics, but you sure don’t know the correct theory to apply to the problem.

The correct concept in your example is for the insurance company to apply actuaries to problem. That is a statistical guess at the payout rate given the demographics of their customers. Given that actuaries are held constant (that is the amount the insurance company pays out in claims), the average cost per unit will go down or the average company profit will go up.

In closing, actuaries, not economies of scale is the correct tool for this job.

Zack Lenhert's picture

What do hamburgers have to do

What do hamburgers have to do with insurance. That is a horrible analogy, insurance does not work like that.

Insurance premiums are based on risk. When risk is spread among a greater number of customers, costs go down. You know, like a group discount, economy of scale.

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