The more you read details like this about Maine, the more you understand just how crazy this whole plan is.
RE: It's Snowe's World, We Just Live In it -- By: Mark Hemingway
By webmaster@nationalreview.com (Mark Hemingway)
A reader notes he points out this tidbit from The Hill article I linked to regarding Snowe's reticence to support Baucus' bill:
Obama and Baucus have suggested paying for a big chunk of reform by levying new taxes on high-cost insurance plans. Specifically, Baucus has suggested a 35 percent excise tax on insurance plans that cost single individuals more than $8,000 a year and cost families more than $21,000.
Snowe's problem with that plan is that it could impose a heavy tax burden on Maine, which has one of the highest average health insurance premiums in the country. A July study by Harvard economist David Cutler found that Maine, on average, has the fourth-most costly insurance premiums in the country, trailing only Connecticut, Delaware and New Hampshire.
Connecting the dots, here's the Wall Street Journal's explanation for why premiums in Maine are so expensive, also linked in my post below:
Why did this happen? Among the biggest reasons is a severe adverse selection problem: The sickest, most expensive patients crowded into DirigoChoice [Maine's "public option" plan], unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates.
This problem was exacerbated because since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules—which are in the Obama plan—have relentlessly driven up insurance costs in Maine, especially for healthy people.
The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn't have community rating and guaranteed issue.
So to sum up, in the name of health care reform the state of Maine instituted regulations that artificially drove up the cost of insurance in the private sector and unbalanced the risk pool in the public option plan. As a result the state raised taxes to pay for the short falls, and even with tax increases there's still a waiting list to get into the public plan. Thanks to Maine's "reforms" people that have private insurance have seen their costs go way up and many people who can't afford the inflated costs of private insurance in the state now can't get into the state's public plan. (A whopping Twenty-two percent of the state is now enrolled in Medicaid.)
Now Baucus' national proposal wants to raise revenue by taxing the most expensive insurance plans. And Maine has an unusually high concentration of expensive plans to tax, not necessarily because of excess wealth but largely because of onerous state regulation -- regulations very similar to ones currently being proposed at the national level. It's the ouroboros of bad legislation. Snowe's constituents are going to get it coming and going. |
