Report: Older Mainers to pay more for health insurance, but many others will pay less

AUGUSTA, Maine — Older Mainers living in rural areas will pay more for health insurance under a controversial bill passed last spring, while many others will see lower rates, according to a new independent report.

Most people who buy their own health insurance, particularly the young living in urban areas, will pay less for premiums as a result of the law, known as PL 90, but about 20 percent who are older and reside in areas such as Down East and northern Maine will pay more, according to a report by Gorman Actuarial of Massachusetts, a consulting firm commissioned by the state to review the law’s impacts.

The bill overhauled the health insurance market for about 40,000 people who buy coverage through the individual market or through employers with fewer than 50 workers, known as the small group market.

“Gorman Actuarial found that thousands of older Mainers and small businesses in rural Maine must now pay more for health insurance under the new law,” Garrett Martin, executive director of the left-leaning Maine Center for Economic Policy, said in a press release. “It validates MECEP’s analysis last spring which warned that while some individuals and businesses would realize lower rates, others would see their costs increase. PL 90 is a flawed law that the governor and the Legislature must act to fix.”

The law allows insurers from other New England states to sell insurance in Maine and gives them more leeway in setting rates based on age, geography and tobacco use. It also creates a high-risk pool for Maine’s sickest residents funded partially by a fee charged to nearly all private policyholders in the state.

Joel Allumbaugh, health care policy director for the conservative Maine Heritage Policy Center, called the report “largely positive.”

“The Gorman report illustrates that 84 percent of small business members benefit from PL 90 in the first year [and] 93.6 percent benefit in the second year,” he wrote in an email.

Allumbaugh also pointed out that the report predicts growth in the small group market.

“This market has been in a death spiral and PL 90 begins to reverse that trend,” he wrote.

The report includes a number of assumptions because lawmakers haven’t fully ironed out the law’s implementation.

The bill, then known as LD 1333, generated heated debate last year after Democrats accused Republicans of rushing the bill through the legislative process. Supporters argued that increased competition and other changes would lead to lower rates, especially for younger people, while opponents said the law would raise costs for older Mainers living in rural areas.

According to the Gorman report, presented Tuesday to the Legislature’s Insurance and Financial Services Committee, rates for individuals could drop 12 to 15 percent, spurring overall growth of that market. As insurers are reimbursed for high-risk individuals using subsidies from the rest of the market, premiums will drop, the report states.

Most of the future growth, however, will result from the federal Affordable Care Act, which mandates coverage for individuals, according to the report.

In the small group market, which includes many small businesses that provide health insurance for their employees, the majority will see little change in premiums. But 7 percent of small group members, generally older populations in rural areas, will see their rates go up an average of 20 percent higher than they would have without the law, the report found. Another 9 percent will see significantly lower premiums.

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Comments

Carl Kimball's picture

IT'S NOT RIGHT

Why should some get a decrease while elderly get an increase in their insurance payments. I think the elderly have done more then their part for this state and country. It's time others started pulling their weight. This state USE to be a great place to work and live, now it's all about greed, welfare, immigrants, joblessness, drugs and untrusting politicians. This whole country has become a laughing stock all around the world. We use to be a great nation, for we worked together, watched out for each other and did what we hope was right. Now we are nothing but a joke. We have laws against drugs, but some people go out of their way to get the drugs at any cost. We send aid to other countries for the poor, homeless and hungry, while we have that right here and have no clue how to fix it. We have become a country of wants, because of greed and the misunderstanding of freedom. On June 5, 1973, a broadcast came out of Canada from a radio station CFBR 1010, from a Mr. Gordon Sinclair. The broadcast became a recording and played all over this nation of ours. It was titled,"THE AMERICAN." I wonder if this man was a live today, would he still look at us through the same eyes. It seems today we have more dislike toward our own government then at any time in our nations history, and this state isn't helping the problem any either...just my opinion...(and no, i have run out of ideas to help pull us back out of this mess, we may have gone to far.)...

FRANK EARLEY's picture

I'm going to try and be nice here

First they want to take away health insurance from those who can't afford to pay for it. Now thier going to force thousands of people who are paying for insurance to give it up. Why?
Because they dare to live in rural and northern areas. These are people who need the insurance the most, and can least afford to pay for it. Many of these people will stop seeing thier doctors and put off medical treatment until things get unbearable then hopefully they can get to a hospital. Unfortunatly for some it will be to late. I'm sorry, but killing the most at risk people in the state is something that gets my blood boiling, it should get everyones boiling.
I have to stop now before I get in trouble. Whoever the rocket scientist is that thought up this program needs to get out of politics.

Jennifer Chretien's picture

Here's a question...why don't

Here's a question...why don't they get this independent analysis of the consequences of a law before the it is voted on???

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