Summary of ME Omnibus Health Care Reform bill – LD 1333

L.D. 1333 OVERHAULS Maine’s health insurance market for about 40,000 people who buy health insurance independently or through employers whose companies have 50 or fewer workers. The legislation:

• Allows companies from every other New England state except Vermont to sell insurance in Maine beginning in 2014. Current law prohibits out-of-state companies from selling insurance here.
• Gives insurance companies more leeway in how much they can charge policyholders based on age. Starting July 1, 2012, some people could pay three times as much for their policies as other people, because of their age. By 2014, the ratio will be 5 to 1. Current law limits the ratio to 1.5 to 1. In 2014, the federal Affordable Care Act will set the ratio at 3 to 1.
• Creates a guaranteed access reinsurance plan, a mechanism for covering insurance costs of people with chronic illnesses.

The nonprofit Maine Guaranteed Access Reinsurance Association will subsidize the insurance of people who have high medical costs. It will be funded by a tax on premiums of as much as $4 per person per month on almost every policyholder in Maine. Legislators and state workers are exempt from the tax.

• Repeals Rule 850, loosening the geographic access standards by allowing insurers to offer incentives to members to use providers based on cost and quality.
• Allows businesses to band together and form their own insurance companies to cover their employees. The new insurance companies will have to follow the same regulations as other insurance companies.
• Repeals the State Health Plan and eliminates the Advisory Council on Health Systems Development, a 20-member group that analyzes factors that drive health care costs and reports to the Legislature. Hospitals will be allowed to expand without complying with the cost containment provisions in the State Health Plan.
• Conforms state loss ratios to federal standards
• Provides a wellness tax credit for employers with 20 or fewer employees