Sunday, March 22, 2009

A step in the right Direction

A step in the right direction.

Usually when I read a bill proposal put forth by our legislators in Augusta, the not so subtle music of a circus begins to flow through my mind. Barnum and Bailey’s quick paced and chaotic theme which plays when the clowns race out to perform their acts of amusement, pounds away as I take in the words so carefully contrived to confuse by our leaders. In all actuality, the music helps me understand what is written and makes me smile as I come to grips with another form of mischief manufactured by the “best of our society”.

Sometimes, you just have to laugh.

Much to my surprise, the last bill that came to me arrived without the expected music. A complete and utter silence surrounded each paragraph as I read along through LD 290 "An Act to Allow Maine Residents to Purchase Health Insurance from Out-of-state Insurers."
Confusion washed over me as I studied the common sense approach to health insurance costs put forth by Rep. McKane of Newport. Confusion, because I have become accustomed to reading bills whose contents either do nothing at all, except flatter the vanity of the sponsors, or which further burden the Maine taxpayers by making them fund another useless program. It is refreshing, to say the least, to finally find a bill in which I find neither vanity nor devilry.

Allowing Maine residents and small businesses to go out of state to purchase polices would be of great benefit to thousands of citizens. They would receive coverage at a reduced rate thus premiums would so too go down. This in turn would make insurance more affordable for the individual. However, I believe that the projected savings will not be huge, for the cost of health care in Maine still ranks very high in the nation. If the cost of administration is higher here in Maine than, let’s say Massachusetts, the insurer will have to take that into consideration when assessing the risk. They will be forced to roll that figure into their rates and pass that on to the consumer. So the idea that our new fought freedoms would produce savings of up to 50%, as some have suggested, cannot be sustained. I would surmise it will be more like 10-15%, if that. Of course, a savings of 10-15% is nothing to sneeze at, especially during these trying economic times.

Circumventing the virtual monopoly of Anthem Blue Cross and Blue Shield in the individual and small group market, LD 290 will force that company and its affiliates to either abandon the market all together like it did in New Hampshire in 2005, or change its rates to compete and retain its market share. Conceivably they just may spend hundreds of thousands of dollars lobbying the State legislature for a bail out, which seems likely considering the mania for bail out programs these days. Rest assured, Anthem will not favor this bill one bit, nor will those legislators who receive campaign contributions from the insurance giant.

We all know what a terrible mess Maine’s insurance market is. Guaranteed issue, Community Rating, Guaranteed renewal, and outrageous mandates have all combined to drive rates and premiums through the roof. The individual and small group market has essentially been destroyed by these laws and insurance carriers have been forced to leave the state because of them. We are in a quagmire, of well intentioned folly which has strangled the citizens of this state far too long.

In 2005, to correct the problems surrounding the failed polices of guaranteed issue and community rating, Maine introduced the Dirigo health plan instead of deregulating the state insurance industry. This too has failed though it is well intentioned like all such programs; it was based upon the very same theories that caused the insurance industry collapse to begin with i.e. guaranteed issue and community rating. So the Dirigo fix to the fix sits in the corner not fulfilling even a tenth of its promise to insure 130,000 people whilst our legislature keeps throwing money into the burning heap hoping that somehow this will quell the flames.

LD 290 does not address the issues of community rating, mandates, or guaranteed issue.

It by passes these issues cleverly, and would ultimately bring some relief to many Maine citizens. It is “a step in the right direction” on the road to rebuilding an equitable deregulated insurance market in our state. By opening the door to competition, and delivering unto the Maine people the opportunity to save some money, it will also stimulate our economy. The saved premium dollars for individuals will be spent in their communities, and for businesses those dollars will be reinvested in their companies, possibly saving if not creating jobs. There is no down side to this bill which I can see, and I hope with all my heart that this passes committee and then becomes law.


Anonymous said...

Great commentary re: healthcare- it is confusing and I think the puppet masters try and keep it that way.

Blighter said...

Thanks for the compliment.

I dont believe that this issue is confusing at all, for if the "Puppet masters" actually removed the cancerous root causes of the insurance problem here in Maine. i.e. guaranteed issue, community rating and health care costs. Then costs would naturally go down with a free and competive market.

I suppose that is a far too simple an approach for the circus folk up in Augusta.


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