Updates on Various Health Care Reform Bills here in Maine

April 16, 2009 Dear Consumers for Affordable Health Care Members and Allies: We are very pleased to report success in moving along health reform efforts in Maine! We have hope that Maine will once again lead the nation with meaningful health care policies. Transparency and Cost Containment On Monday, there was great turnout to the public hearing in support of LD 1205, An Act to Establish a Health Care Bill of Rights, sponsored by Insurance and Financial Services Committee House Chair Sharon Treat. Thanks to all of you who came to Augusta to offer testimony and to those of you who couldn't join us but sent in testimony; special thanks to the Maine People’s Alliance, Kennebec Valley Organization, Maine Center for Economic Policy, Maine Equal Justice, and Maine Women’s Lobby for their testimony. We felt a change in the air compared to past years; lawmakers seem to understand that consumers are fed up with the lack of information we are getting about our health insurance plans and how little of our premiums are spent on medical care. We believe that with more effort, we can make transparency and cost containment from our health insurers a reality. To that end, we focused our testimony on the need for more information when choosing an insurance plan. The analogy of the day came from Representative Treat, who noted that you can get more information when buying a house than you can when purchasing health insurance. Indeed, before you make that huge investment someone inspects the house and tells you what's good and what's not. Imagine if buying health insurance were like that! When many of us are spending the equivalent of a mortgage on health insurance the process should at the very least have some checks and balances like a home! A lot of Monday’s testimony was about the amount of our premium dollars that insurers spend on actual medical care (medical loss ratio). We believe that insurers can increase this amount and use our health care dollars more wisely. But we have to help our legislators understand why getting more of our premium dollars spent on our health care, instead of profits, advertising, and lobbying is important. To help you talk with legislators and others, you'll get an action alert and talking points from us soon. On the Dirigo Front . . . On Tuesday, the Insurance and Financial Services Committee heard two bills to stabilize funding for DirigoChoice. As we all know, the Savings Offset Payment (SOP) mechanism has proven to be contentious, litigious, and unstable; it has not been able to provide stable funding for the program. Legislative changes made after the passage if the Dirigo legislation that dramatically extended the collection period of the assessed savings made the problem worse. CAHC vigorously opposed those changes on the grounds that it would create cash flow issues for the program. Our objections and insight went unheeded, and the legislature adopted the changes to the detriment of the program. In the last legislative session CAHC reluctantly agreed to “compromise legislation” that provided an alternative funding mechanism for the Dirigo program while providing a reinsurance component designed to offer rate relief to Maine’s health insurance consumers. The legislation was based on recommendations offered by the Blue Ribbon Commission to Study Dirigo Health. The Fed Up With Taxes campaign, fueled by over $4.5 million dollars of out of state money, derailed the implementation of the legislation. The Governor and Representative Sharon Treat have offered another option, which is the only legislative option left to save and stabilize the program. The bills heard on Tuesday, LD 1005 and LD 1264, move the funding from the current SOP mechanism to a straight monthly assessment of 2.14% on paid claims by private insurance carriers. It is estimated that the change will result in a stable base of funding of $42 million dollars annually to support the program. Although the two bills are similar, LD 1005 – An Act to Continue Access to Dirigo Choice Health Insurance by Reducing Administrative Costs and Replacing the Savings Off Set Payment, contains an important difference that all CAHC members should support. LD 1005 prevents the cost of the assessment paid by the carriers to be passed onto those of us who pay premiums. We call it a “no pass through provision”. It is important that the DirigoChoice program be stabilized, but it also important that its costs not be shifted onto us. CAHC Coalition members pressed this point at this week’s public hearings. It is vital that we support the existence of the DirigoChoice program that many Maine families rely on. It is also an important platform to assist Maine’s workers who have lost their jobs. For them the DirigoChoice option is a lifeline. The Dirigo Health Agency and the DirigoChoice product are also vital to the implementation of the “mini-COBRA” federally subsidized plans that are coming to Maine as part of the economic stimulus legislation recently approved by Congress. Much is at stake, and that is why CAHC supports the funding change. At Tuesday’s hearings, CAHC staff and Coalition members expressed our support, but objected to the cost being passed onto Maine’s consumers. We feel this is especially true given the savings the Dirigo reforms have brought to Maine’s health care system. We urge our members to contact your elected officials and demand that the costs of the Dirigo program not be passed on to us, and that more needs to be done to make health insurance more accessible and affordable for Maine people. We need to support LD 1005 as the best alternative. Single Payer Tuesday was also a day for two important bills on single payer efforts in Maine. Lots of folks testified on both LD 1365, An Act To Establish a Single-payer Health Care System, sponsored by Representative Charlie Priest and LD 1002, Resolve, To Conduct an Updated Study of the Feasibility of Establishing a Single-payer Health Care System in the State, sponsored by Paulette Beaudoin. LD 1365 lays out a plan for a single payer system in Maine, and LD 1002 directs the state to fund a feasibility study for implementing single payer. CAHC spoke out in favor of both bills, hoping to lay the framework for further health care reform in this state. Let your legislators know how important these bills are. We ask you all to think about how you can help to educate our leaders about the need for transparency and cost containment in our health care and coverage. We all agree enough is enough. In this economy, we need to make our dollars go further--with the cost of health care so integrally linked to the economy, the only way to fix our economy is to fix our health care system. These transparency and cost containment measures are some steps in the right direction. We work hard for our money. Let's make sure that all of us who pay dearly for health coverage get a chance to make informed, smart decisions. Those decisions are the framework for ongoing and meaningful health care reform. Please contact us if you have any questions or would like to discuss further. Best, Doug & Darcy Douglas R. Clopp Director of Governmental Relations/Coalition Coordinator Consumers for Affordable Health Care Foundation "Advocating the right to health care for every man, woman and child." 39 Green St., P.O. Box 2490, Augusta, ME 04338-2490 Ph: 207.622.7083 Cell: 207.318.2378 Fx: 207.622.7077 Email: dclopp@mainecahc.orgwww.mainecahc.org "Of all the forms of inequality, injustice in health care is the most shocking and inhuman." Dr. Martin Luther King, Jr. Darcy Shargo Health Policy Advocate Consumers for Affordable Health Care P.O. Box 2490 Augusta, ME 04338-2490 Phone: 207.622.7083 or 207.622.7045 Fax: 207.622.7077 E-mail: dshargo@mainecahc.org Website: www.mainecahc.org HelpLine: 1.800.965.7476