Maine's health overhaul benefits insurers

Maine has overhauled its health insurance system with Gov. Paul Le Page's signature on a contentious bill and it seems that insurers stand to benefit from the bill's impact.

For example, the Maine health overhaul law allows insurers to charge older customers up to five times more than younger ones. However, the federal health reform law will cap that ratio at three to one in 2014, according to The Hill’s Healthwatch. Although the expanded "rating bands" will allow insurers to charge significantly less to younger, healthier Mainers and spread the risk over a larger pool, they could also mean higher rates for those who are older, sicker and live in rural areas, Bloomberg BusinessWeek reports.

This provision allows insurers to focus more on urban areas with larger pools of younger and healthier people, who statistically do not pose the risks associated with older Mainers who tend to populate small rural communities.

The law also allows out-of-state health plans based in New Hampshire, Massachusetts, Rhode Island and Connecticut to sell policies in Maine without getting a license there, notes BusinessWeek. But beginning in 2014, the federal reform law will require insurers to be licensed in every state where they want to sell coverage through the health insurance exchange. Insurers could still take advantage of the Maine law without violating federal law, but only if they opt out of the new marketplace for individuals and small businesses, Healthwatch notes.

Meanwhile, another bill making its way through Maine's legislature would exempt church-based organizations that sell healthcare coverage from state insurance regulations, reports the Bangor Daily News. Although regulators across the country are claiming ministries are insurance providers, Michael Thibodeau, a state lawmaker who introduced the bill, said the plans don't operate like insurers and make no guarantee of coverage. Therefore, the state bill would protect health ministries from possible legal actions brought by such regulators, including the Maine Bureau of Insurance. 

To learn more:
- read the Maine bills covering health overhaul and church-based organizations (.pdf)
- see the Bloomberg BusinessWeek article
- check out The Hill’s Healthwatch piece
- read the Bangor Daily News story