Issues in the News

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2007 Session Report: Health-Insurance Reform
08/17/2007

Issue Overview: Maine's individual and small-group (up to 50 employees) health-insurance markets are suffering from high costs that make it increasingly difficult to obtain or keep affordable insurance policies.

A snapshot of the individual and small group markets may be found on the Bureau of Insurance Web site:

Apart from the effects of healthcare costs and the age of Maine residents, some observers believe part of the state's insurance problems result from specific features of Maine insurance law that are different from most other states. Chief among these differences are guaranteed issue in the individual market, the lack of a high-risk pool for individuals with particularly costly health conditions, and community rating restrictions that control the computation of premiums in the individual and small group markets.

Some observers believe Maine's health insurance costs could be brought down if everyone was required to obtain insurance coverage. In fact, the governor's Blue Ribbon Commission on Dirigo Health recommended in its January report that individuals who earn at least 300 percent of federal poverty levels (sliding scale depending on family size) and businesses be required to obtain health insurance or pay a penalty.

Issue Status: The Legislature during its 2007 session failed to find consensus on insurance market reforms that were proposed by Gov. Baldacci as part of LD 1890:

    • Individual and Employer mandate to obtain health insurance (NFIB opposes)
      • Governor proposed
      • Senate Democrats and Republican members of the Committee on Insurance and Financial Services rejected
      • House Democrats would have required the Department of Labor and the Governor's Office of Health Policy and Finance to study the issue and submit legislation for consideration in 2008
    • Merge individual and small group markets (NFIB has no position yet)
      • Governor proposed
      • Senate Democrats and Republican members of the committee rejected
      • House Democrats would have required the Bureau of Insurance to study the issue and make recommendations for the committee's consideration in 2008
    • Repeal guaranteed issue in the individual market (NFIB has no position; this issue does not affect the small-employer group market)
      • Governor proposed
      • Senate Democrats and Republican members of the committee supported
      • House Democrats opposed
    • Modify community rating restrictions (NFIB supports consideration of changes that may improve the insurance market situation but that do not create new cost-burdens for small employers – Maine is one of a few states that use community rating, and all of these states appear to have high health insurance costs)
      • Governor proposed
      • Senate Democrats and Republican members of the committee supported
      • House Democrats supported a different version that would have modified rating limits in the individual market but not on the basis of age and also would have eliminated rate variations in the individual market on the basis of occupation or industry and geographic area
    • High-risk individual insurance program (NFIB supports and also urges legislators to consider potential problems of very high cost people in the small-employer group market)
      • Governor proposed
      • Senate Democrats and Republican members of the committee supported a high-risk reinsurance pool based on a program that exists in Idaho
      • House Democrats came up with a similar but more involved proposal that would not have taken effect until insurance companies had reached certain benchmarks for premium reductions


What You Can Do: Contact members of the Committee on Insurance and Financial Services and let them know of your interest in health-insurance reform that increases access to affordable insurance choices. Ask them to work with NFIB on assuring reforms that will benefit small business. (The links below are to the Legislature's official biographical page for the lawmaker and will contain e-mail and telephone contact information as well as additional details that may interest you.)

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