AUGUSTA — A campaign-trail panacea to Maine’s health care costs came under fire Tuesday from the state’s largest business advocate and insurance providers.
The Maine State Chamber of Commerce, Anthem Blue Cross and Blue Shield and other groups said a slate of proposals that would allow Mainers to purchase insurance across state lines would have far-reaching consequences that could hurt Maine businesses and create an uneven playing field among insurers.
Meanwhile, health advocates such as the Maine Medical Association said allowing interstate competition could drive up rates for older, sicker Mainers.
“These proposals have some superficial appeal and might make good campaign rhetoric, but they don’t stand up to a careful insurance market analysis,” said Andrew MacLean of Health Care for Maine, a coalition representing several groups, including the MMA.
The coalition’s testimony before the Insurance and Financial Services Committee was expected, given its support for the federal health care law, the Affordable Care Act.
But the state chamber’s opposition on two of the interstate insurance bills could have ramifications within the Republican caucus.
Both proposals are essentially manifestations of 2010 campaign promises and Republican candidates, including Gov. Paul LePage.
The GOP has frequently championed the interstate insurance concept, arguing that allowing Mainers to purchase across state lines would create competition and drive rates lower. Last year, a bill that set out to do just that received the support of every GOP lawmaker who voted.
The bill ultimately failed along partisan lines.
Chamber spokesman Peter Gore said Tuesday the concept was well-intended but would ultimately create “winners and losers” in the business community because out-of-state insurance companies would not have to conform to Maine’s regulations and could cherry-pick from businesses with healthy work forces, leaving Maine providers to insure the high-risk pool.
“If you medically underwrite the businesses in Maine that you want to insure, you’re going to underwrite the businesses that are younger and healthier,” Gore said after the hearing.
He added, “If your risk is right, then you would benefit from these bills. If your risk is wrong, then you probably won’t.”
The Maine chapter of the National Federation of Independent Business expressed support for three of the proposals. David Clough, director of the Maine NFIB, said the proposals were a step in the right direction.
Anthem, which offers health plans to chamber members, opposed five of the proposed bills. Kristine Ossenfort, speaking for Anthem, said interstate competition wouldn’t work because different states have different regulatory structures for insurance.
“In the past, proponents of similar bills have argued that allowing the sale across state lines will bring people into the market,” Ossenfort said. “The problem is, it won’t bring those people into the Maine market.”
Representatives from Cigna, Harvard Pilgrim and the Maine Association of Health Underwriters opposed several or all of the bills. Each argued that efforts to bring down insurance costs should focus on Maine insurance regulations.
Organizations such as the National Association of Social Workers, the American Cancer Society and the AARP said the bills would be harmful because Mainers could be lured into buying more affordable insurance without knowing that the coverage may not be as comprehensive.
MacLean, of Health Care for Maine, cited a study by the National Association of Insurance Commissioners that concluded that the benefits of interstate competition were overstated. The study said interstate health insurance would reduce consumer choice and insurance companies would cover less as they designed plans to discourage sick customers from enrolling.
The NAIC report also said insurers that comply with consumer protections could be forced by out-of-state competitors to evade the regulations.
MacLean’s group also noted that interstate insurance exchanges were forthcoming in the Affordable Care Act. The federal law will allow interstate sale of insurance by 2016. That process will begin once states join exchanges adopting the same regulatory framework.
Rep. John McKane, R-Newcastle, is sponsoring one of the bills to create the interstate sale of insurance with New Hampshire. McKane said he supported the exchanges in the Affordable Care Act, a comment that caught some Democrats by surprise.
That’s because Republicans have supported the state’s joining a lawsuit that would remove a key provision of the ACA, the individual mandate. Proponents of the health care law say removing the mandate could undercut the entire law.
McKane said he wasn’t against all of the ACA, just the individual mandate.
The LePage administration, through testimony from the Bureau of Insurance, stayed neutral on two of the proposals. However, the administration appeared to support interstate compacts made available in the ACA.
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