Cost estimates range from an additional $5 to $6 per person monthly
The Joint Standing Committee on Health Coverage, Insurance and Financial Services (HCIFS) has approved a sweeping health insurance mandate that will significantly add to the cost of insurance for individuals, small businesses, and large employers – and employees who receive coverage from their place of work. The committee’s vote was almost along party lines, with seven Democrats in favor and five Republicans and one Democrat opposed.
The bill in question. LD 1539, An Act Provide Access to Infertility Care, sponsored by Rep. Colleen Madigan (D-Waterville) was submitted during the first session of the 130th Legislature in 2021 and carried over to this session. In the case of proposed coverage for mandated health insurance benefits, the Maine Bureau of Insurance (BOI) is required, unless bypassed by the legislature, to conduct a study on the impact of utilization and cost, in order to determine the impact of the proposal on health insurance premium. The results of the BOI study can be found here: https://www.maine.gov/pfr/sites/maine.gov.pfr/files/inline-files/LD1539-and-LD922-Mandated-Benefit-Analysis.pdfn. It estimates that costs will increase between $5.03 to $6.32 per member (insured) per month, without cost sharing. And to be clear, this mandate would apply to all individual, small group, and large group plans sold in Maine.
Part of the steep costs associated with LD 1539 is the fact that insurers are prohibited from implementing any type of limitations on the coverage – for example, limiting costs per procedure, the number of time individuals can seek treatment per year, the age of the individual seeking the treatment, and others. Without guardrails, passage of LD 1539 would result in one of the most expensive mandates applied to coverage in Maine in nearly two decades.
The Maine State Chamber testified against LD 1539 last session. We indicated to the committee that we recognized and were deeply sympathetic to the plight of those individuals who wish to have children but could not. We also acknowledged the clear benefit such a mandate would bring to these folks. At the same time, we were deeply concerned it would raise the rates of others by socializing the cost across all insureds, whether they access this mandate or not. Because we believed this mandate held the potential for further increases in health care costs in Maine and the concerns businesses have regarding the existing cost of health insurance, the Maine State Chamber opposed the bill. Based on the Bureau’s mandate study, it appears our concerns were warranted.
What is particularly ironic, however, is that passage of LD 1539 would negate a portion of the savings associated with very recent merger of the individual and small group markets – which was recently announced by Governor Janet Mills and the BOI and touted as bringing real savings, particularly to small businesses. At the request of the Mills Administration, the bureau and key stakeholders have been working on this proposal for more than a year. According to the bureau, the savings associated with the merger of the markets could be as high as 8% for individuals and 6% in the small group market in 2023, falling to 6.1% and 3.9% in 2024. LD 1539 would diminish those savings with premium increase potentially between 0.90% and 1.13%.
Passage of LD 1539 would also help negate the recently announced Small Business Rate Relief Program, implemented by Governor Mills and the BOI, which is designed to provide up to $40 million in direct premium reductions to both employees and employers. Again, passage of LD 1539 would take away a portion of that direct relief and require every individual and employee to pay for the mandate – even if they never have or intend to use it.
Our organization has said before the HCIFS committee and the full legislature many times that mandated benefits, no matter how well intentioned, serve no purpose if they push health insurance premiums beyond the reach of either the employer or the employee. The challenge for employers to maintain their health insurance benefits in the coming months and year will depend on many things, and the cost of that insurance is chief among them. Just as there appears some cost relief on the horizon for employers and their employees, passage of LD 1539 would impose higher costs on everyone to benefit a few. While we recognize those few could benefit greatly from LD 1539’s enactment, it also may result in the total loss of health insurance coverage for others.
The bill itself has not been released from committee and will likely undergo final language review very soon. The Maine State Chamber will be following this important bill closely and keeping members informed of its progress through the full legislature. For additional information or questions, please contact Peter Gore, executive vice president, by calling (207) 623-4568, ext. 107, or by emailing email@example.com.