Bookmark & share:

E-mail this page E-mail a letter to the editor Reader Comments (below)

BY JOSIE HUANG
MaineToday Media, Inc. 04/29/2008

MaineToday Media, Inc.

Mainers saw the cost of health insurance grow faster than their incomes in recent years, though the disparity was less dramatic than for the nation as a whole, according to a study released today.

Insurance premiums for Maine families rose about 27 percent from 2001 to 2005 -- about three times faster than the incomes of policyholders, whose pay grew by nearly 10 percent. Nationally, premium costs rose 30 percent over the same period, while incomes increased by just 3 percent.

Researchers who analyzed the federal data for the Robert Wood Johnson Foundation did not give a reason for Maine's trends, but state health officials heralded it as a sign that the Dirigo health reform initiatives in the state, such as spending restrictions on insurers, were working.

"The fact that we've been able to slow the rate of growth (of premiums) and maintain employer coverage is very good news," said Trish Riley, director of Gov. John Baldacci's Office of Health Policy and Finance.

Others put less credence in the study. Tarren Bragdon, health policy analyst for the Maine Heritage Policy Center, suggested that premium costs were rising slower because people were sticking with basic plans just to afford coverage in a state that he said drove up costs by overregulating insurers.

"We don't know if people are buying less rich plans than people in other states," said Bragdon. He said a better comparison would look at how much a particular benefit package costs from state to state.

Here are other findings from the study, which used information from the U.S. Census Bureau and Agency for Healthcare Research and Quality.

• Maine ranked 21st in the country for how much its premiums costs rose. Neighboring New Hampshire was 46th, but its average premium costs in 2005 were the second highest in the country: $11,835. Maine's costs averaged $11,289.

• Of the six New England states, Maine's premium costs for the average family in 2005 were the lowest. But Maine families contributed the largest percentage to their premiums -- more than 29 percent, an indicator that employers in Maine are trying to cut their costs.

• The percentage of people with private insurance in Maine fell from nearly 73 percent to 68 percent from 2000 to 2006. Yet Maine's uninsured rate is one of the ten lowest in the country, and actually improved over the last several years.

The average rate for 2005 and 2006 was a little over 11 percent, about 128,000 people.

Consumer advocate Hilary Schneider explained the discrepancy by saying that Maine's Medicaid program is picking up people who lost employer-based coverage.

"It's the safety net effect," said Schneider, policy director for Consumers for Affordable Health Care.

• The number of employees who work at firms offering health insurance declined by 1.2 percent between 2001 and 2005 -- a development that analysts attributed to the closure of manufacturing plants in recent years. Another reason given is that employees are opting out of health insurance at their jobs because of the expense.

During the same period, however, the number of employers in Maine that offer health insurance grew by 251 -- a 1.3 percent increase.

Brian Quinn, program officer at the foundation, said that the state-sponsored DirigoChoice insurance program, which began in 2005, may have allowed some businesses to offer insurance.

"Certainly Dirigo was targeted at small employers," Quinn said of the priced-on-ability to pay program. "Although my understanding is that uptake in Dirigo was slow and hasn't been what they had hoped for."

By the end of 2005, Dirigo had signed up more than 7,000 members. As of last month, enrollees number nearly 12,900.

Quinn said the report, rolled out for "Cover the Uninsured Week," aims to show how insurance costs are taking a larger bite out of household budgets. He attributed cost increase to multiple factors, including an aging and unhealthy population and expensive medical technology.

Bookmark and share this story: