L.D. 1333, health reform signed into law in May, helps protect Maine’s most vulnerable populations. Unlike past efforts, L.D. 1333 effectively serves these populations by addressing the critical issue of affordability.

Maine’s past attempts at promoting affordable coverage for the vulnerable have been well-intentioned, but have not succeeded.

For example, insurance reforms in the early 1990s, guaranteed access to health coverage for everyone, regardless of health status. In doing so, however, rates climbed drastically. Now, everyone has access to coverage many cannot afford.

Dirigo, Maine’s attempt to eliminate the uninsured — another well-intentioned effort that I originally supported — was a failure. The goal was to provide financial assistance to those ineligible for MaineCare but still struggling to afford Maine’s costly health insurance premiums. But after several years and nearly $200 million in taxpayer money spent, more Mainers are uninsured today than before Dirigo.

Where prior efforts have failed to protect Maine’s most vulnerable, L.D. 1333 may just succeed by addressing the root of the problem, affordability.

AFFORDABLE COVERAGE

FOR THE SICKEST MAINERS

L.D. 1333 creates the Guaranteed Access Plan to subsidize the medical claims for the sickest of Maine’s individual policyholders.

At the Bureau of Insurance’s recent rate hearings, Anthem reported that 11 percent of individual policy holders incur 95 percent of all claim costs. The Guaranteed Access Plan (GAP) is a funding mechanism to ensure the cost of the 11 percent does not dramatically increase premiums for everyone. Applicants with pre-existing conditions still are guaranteed coverage and nearly their entire annual claim costs are subsidized with GAP funding.

Separating funding for coverage for the sickest policyholders helps reduce costs for all policyholders. And while much of the funding for their coverage is subsidized, enrollees in the GAP won’t see a difference. Their premiums, benefits and access to care will be the same as those outside the GAP.

AFFORDABLE COVERAGE

FOR YOUNG MAINERS

L.D. 1333 also promotes lower rates for younger, healthier applicants by providing insurers flexibility to vary rates among different aged applicants.

Maine’s current community rating law prohibits insurers from varying rates between different age groups, even though older individuals, of whom I am one, use, on average, four to five times more in services than policyholders in their 20s.

This rating law has chased away a significant number of young Mainers from the health insurance market, as premiums are too expensive for this healthier population. The result is fewer people in the insurance market among whom to spread costs, raising rates for everyone.

The flexibility to vary rates between different aged populations will help insurers reach a price point that is affordable for a greater number of people, especially young people.

AFFORDABLE COVERAGE

FOR RURAL MAINERS

Our current laws have resulted in very high insurance premiums in rural communities. L.D. 1333 takes important steps to promote transparency and opportunities for patients to receive the highest quality, most cost-effective care.

L.D. 1333 enables insurers to provide better information to their policyholders about the cost of services in different areas, and cost and quality of care comparisons between doctors and hospitals. The law allows insurers to negotiate lower costs with rural health providers on behalf of their policyholders, and allows cost incentives for patients choosing designated providers.

FEWER UNINSURED MAINERS

L.D. 1333 reduces premiums and promotes greater access to quality health coverage. As premiums become more affordable, more residents will be able to afford health insurance. When more Mainers are enrolled in the private insurance market, everyone’s rates drop.

In addition, beginning in 2014, L.D. 1333 allows Mainers to buy insurance available in New Hampshire, Massachusetts, Rhode Island and Connecticut, a concept supported by many Democrats. This flexibility increases options available within Maine’s private health insurance market and allows more Maine families to purchase insurance that meets their needs and budgets.

Maine previously attempted to tackle the cost issue by spending more money. Dirigo shows how this approach has failed. Maine’s most vulnerable populations have often been victims of these short-sighted policies.

L.D. 1333 takes a fundamentally different approach, allowing human nature and basic economic principles to guide patient-centered reforms. An insurance market that including more options for individuals and families to choose from will result in more affordable premiums for a greater number of people, especially the vulnerable.

This solution will not cause unintended effects that make the original problem worse.

Democratic Rep. Stephen Hanley represents Gardiner and Randolph in the Maine House. He can be reached at RepStephen.Hanley@ legislature.maine.gov, or at 582-9073.