Insuring a healthy future

December 27, 2010

Resisting health care reforms only impedes progress toward better care and costs.

In Maine and across the country, any discussion of health care presents serious challenges. Yet, we cannot overlook the silver linings as we survey the situation. First of all, United Health Foundation recently ranked Maine the eighth healthiest state ahead of New York, Colorado, North Carolina and Florida, among others. Maine’s strong health insurance coverage, infectious disease prevention and access to early prenatal care are paying dividends. What better measure is there than the health of Maine’s people?

Maine has also made important strides in recent years to rein in health care costs. Since 2003, costs for employer-based health insurance premiums and deductibles have grown more slowly in Maine than in the United States as a whole. Maine’s insurance market is more competitive, with more providers in the state than in 2003. By 2009, Maine’s insurance reforms and expanded health care coverage attributed in part to Dirigo Health reforms lifted the state to sixth nationally in coverage, up from 19th in 2003. It helped Maine reduce health care spending by more than $200 million since 2005. Insured people are less likely to delay treatment and resort to costlier care.

Still, more work lies ahead. Health care costs remain relatively high in Maine. Businesses and workers spend a disproportionate share of income on both health insurance and care.

Short-term solutions threaten improvement Where health care is concerned, what appears to be the simple solution because it saves money in the short run isn’t always best or most cost-efficient over time.

Starting in 2014, states will implement one-stop shops where individuals and businesses can save time and money by comparing and purchasing health insurance from a standard menu of products. This will make insurance companies compete on customer service and their ability to manage costs, rather than on their ability to weed out risks or deny claims. For those with the greatest risks — uninsured people with long-term chronic health conditions, for example — Maine created a high-risk insurance pool, managed by the Dirigo Health Agency and funded with federal dollars.

To make affordable insurance available, the one-stop shop will also help determine individual eligibility for federal insurance subsidies or Medicaid. Individuals and families earning up to 400% of the federal poverty level, $88,200 for a family of four, will receive a subsidy to cover premium costs above 9.5% of income.

Through DHA, Maine has developed a system to determine subsidy eligibility for individuals and families earning up to 300% of the federal poverty level and enrolled 31,813 individuals and 1,243 small businesses since 2005. Building this system anew makes little sense. Improving it to provide a transparent, easily accessible marketplace for insurance purchasers and providers is a better use of time and resources.

Another simple solution frequently cited is to let individuals buy insurance out-of-state. Insurance companies based in other states will happily offer less expensive coverage with fewer benefits to young, healthy individuals living in areas of Maine with lower health costs. The rest of us won’t be so lucky. Our insurance costs will likely increase as Maine-based insurance companies adjust premiums to cover an older, less healthy risk pool.

The “winners” in this out-of-state free-for-all scheme may not be so lucky in the end, either. Since states regulate health insurance companies, a Maine resident who runs into a problem with an out-of-state insurance company will have little recourse as a nonresident of that state. What stake do Mississippi’s insurance regulators have in protecting the interests of Mainers?

Finally, the incoming administration’s decision to join a challenge to the constitutionality of some personal responsibility provisions of the Affordable Care Act wastes limited resources. Two federal district courts have upheld the law’s constitutionality and one ruled against; ultimately the Supreme Court will decide and Maine’s participation in this suit will have little bearing on the outcome.

Costs must be the focus In the next few years, we should focus available resources on creating a one-stop shop that works for everyone, building a health information system that delivers better quality care and lower costs, expanding coverage to higher-risk populations and strengthening our primary care system.

Ultimately, the underlying cost of the health care delivery system requires our greatest attention. We can preserve access to care, improve quality and reduce costs if we all concentrate on the same set of outcomes. The Maine Health Management Coalition and the Office of MaineCare Services are already leading the way in coordinating public and private actions to accomplish this.

Improvements won’t occur overnight and must not undermine innovations already paying dividends. Eliminating the Dirigo Health Agency and weakening important consumer protections, as some potential members of the incoming administration suggest, is not the answer. Maximizing opportunities presented by the Affordable Care Act and building on existing investments in our health infrastructure would better serve Maine’s people and economy.
Garrett Martin, associate director of the Maine Center for Economic Policy.

Maine BIZ