Health insurance premiums in Maine rose more than five times faster than median income in the state between 2000 and 2007, according to a new report from the national health care advocacy organization Families USA.

The report, updated from a 2006 study, does not provide state rankings. It calls for leadership in health care reform at the state and national levels, but Maine policy experts are divided on what that leadership should entail.

The report, released Wednesday morning, shows that the median earnings of Maine workers rose from $22,163 to $25,876 between 2000 and 2007, an increase of 16.8 percent. Employer-based health insurance premiums for family coverage during the same period rose an average of 89.7 percent, or 5.4 times faster than income, according to the report.

Compounding the problem, the steep rise in the cost of health insurance has forced many Maine employers to shift a higher percentage of the monthly premium to workers, while other businesses are simply unable to offer coverage at all. And even those workers who do have insurance may find themselves paying increased out-of-pocket amounts – higher deductibles and co-payments – for a less comprehensive level of coverage that may exclude certain services or have other limitations, the report says.

“Skyrocketing health care costs were a problem in Maine before the current economic downturn, and slow wage growth or job losses now only make matters worse,” said Ron Pollack, executive director of Families USA in a prepared statement. “As health care becomes less and less affordable, Mainers face difficult choices in trying to provide health coverage for themselves and their families. A bad situation is clearly growing worse.”

Situation may get worse

Pollack said more Mainers, and more Americans, will face “diminishing economic and health security” if trends continue, and he predicted the health care crisis “will only worsen until there is leadership in Washington. D.C., and in the states that takes decisive and meaningful action to make health care truly affordable and accessible to all.”

According to Tarren Bragdon, executive director of the politically conservative Maine Heritage Policy Center, the best way to drive down the cost of health care and health insurance is to stimulate market competition.

“The Families USA report points to the need for more flexibility and competition … so Maine families have more choices than they have right now,” he said. Bragdon said regulatory pressures, including mandated coverage of certain health care benefits, limit the ability of insurance companies to offer a full range of insurance plans to Mainers.

Care options

Bragdon also said that supporting the development of walk-in health clinics at pharmacies and big box stores such as Wal-Mart can provide ready access to cost-effective primary care services using nurse practitioners and physician assistants rather than higher-paid physicians.

“It’s a good thing,” he said of the trend, which is growing in some states. “It will reduce costs and reserve more expensive providers for those people who need that level of care.”

Taxation of health care spending in hospitals and nursing homes only exacerbates the problem, Bragdon said.

Trish Riley, director of the Governor’s Office of Health Policy and Finance, said deregulation will only make matters worse.

“The competitive model tends to be crisis-driven and less about prevention and wellness,” she said. “People need access to secure, reliable care.”

Dirigo reforms

Riley said the Dirigo Health Reforms enacted by the Maine Legislature under the administration of Gov. John Baldacci have played a significant role in holding down premiums.

Each year from 2001 to 2003, she said, Maine employers saw the highest increase in health insurance costs in New England. Since the Dirigo reforms were implemented in 2003, she said, the annual increase has dropped to the lowest in New England, along with the number of uninsured residents.

Unlike Bragdon, who predicted that the national and global economic crisis would eclipse the need for comprehensive health care reform in Washington, D.C., Riley said the precarious economic condition makes health care reform all the more essential.

“We [in the United States] spend twice what everybody else spends and we don’t get any better quality,” she said. National reform must focus on containing costs by eliminating waste and improving the quality and continuity of care, Riley said.

The Families USA report, updated from a 2006 study, uses data from the U.S. Census Bureau, the U.S. Department of Labor, and the U.S. Department of Health and Human Services. State updates are being released individually.

The full report, including updated information from some other states, may be read online at www.familiesusa.org.