LEWISTON — Maine health care experts said Friday that a tentative deal struck by U.S. Senate Democrats on health care reform could result in higher private insurance costs in the state, and Maine’s moderate Republican senators, Olympia Snowe and Susan Collins, say they oppose the deal.

The idea put forth as part of an alternative to a government-run health care plan, known as the “public option,” would allow individuals 55 to 64 years old to buy into the Medicare system. They would have to pay the true cost of the program, rather than the subsidized version that those 65 and older pay, but they would get largely the same benefits. Hospitals and doctors providing services to those patients would get reimbursed at the Medicare rate.

Mary Mayhew, vice president of government affairs for the Maine Hospital Association, said Maine’s hospitals currently receive the second-worst reimbursement in the country, about 79 cents on $1 of cost.

When hospitals get reimbursed less than the cost of the health care service, they make up for the loss by charging private insurance companies more, she said.

“In 2007, Maine’s hospitals lost over $142 million caring for Medicare beneficiaries that had to be recovered in some way, largely through cost-shifting to those who are commercially insured,” Mayhew said. “This will absolutely exacerbate the affordability crisis for commercial health insurance premiums.”

Gordon Smith, executive vice president of the Maine Medical Association, agreed that the proposal likely wouldn’t work for Maine.

“If you keep expanding the public plans and if those plans don’t pay for the full cost of care, then the rest of it just exacerbates the cost shift,” he said.

Trish Riley, director of the governor’s Office of Health Policy and Finance, said it was difficult to look at one aspect of the comprehensive bill and determine its impact.

“I understand and appreciate the concerns about payment rates, but it’s important to look at it as a whole because you’ve also got new mandates that will bring even more people into commercial coverage at full rates,” she said, which is something that would help keep costs down.

In Washington, D.C., Sens. Snowe and Collins continue to make headlines for their efforts to improve the health care reform package, all the while refusing to commit themselves to voting for the bill.

Both dislike the Medicare expansion proposal.

“I fear this would cause just more cost to be shifted, because Medicare would be underpaying for an even larger segment of the population than we have now; it would worsen the problem we already have,” Collins said in an interview. She recently joined Sen. Ron Wyden, D-Oregon, in filing three amendments to the bill aimed at containing costs.

Snowe, who has been working on the issue for months, said she found the proposal appealing  — until she gave it a closer look.

“I’m deeply concerned about the cost-shifting that would be accentuated through this Medicare buy-in program and secondly, it would be an expensive option for individuals because they would have to pay the true cost (of a Medicare premium), not the subsidized cost,” she said.

Snowe offered praise for another proposal recently developed by Democrats that built on some of the provisions she had added to the bill.

“I put the national plans in there so the small businesses could buy plans across state lines and (the Democrats) took that idea and expanded upon it, by recommending the Office of Personnel Management negotiate these national plans,” she said in an interview. “There would be two (plans), one for profit and one nonprofit, that would be available in every exchange across the country, which is a good idea.”

The Office of Personnel Management is the negotiator for the federal employees health benefit plan, which is the health insurance used by members of Congress.

“It’s an extension of that role that they have played so successfully over the years in negotiating with private insurers and achieving really good rates,” she said, adding that the plans would be based on the standards that are already included in the legislation.

“So (the plans) wouldn’t have to adhere to state mandates and the ratings would be based on a national composite rating,” Snowe said. This would be an important way to help keep premiums affordable, she said.

In meetings this week with President Barack Obama and Democratic colleagues, Snowe said she has continued to stress the importance of getting the details of the legislation right, even if it means taking more time.

“Given the extraordinary times in which we live and the challenging economic environment, it’s all the more imperative that we do not take any risk with what the effect of this legislation on the ability of small businesses to create jobs and the cost of capital to industry and the economy, not to mention individuals,” she said.

“We have to reinforce the public’s confidence in the integrity and the credibility of whatever package emerges and that’s why it’s more than just fine-tuning; it’s really making sure that these provisions are going to work.”

The Senate isn’t expected to take any more health care votes until next week.

[email protected]


Only subscribers are eligible to post comments. Please subscribe or to participate in the conversation. Here’s why.

Use the form below to reset your password. When you've submitted your account email, we will send an email with a reset code.