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Public Hearing Set for Rep. McKane's Bill on Out-of-State Health Insurance

AUGUSTA – State Rep. Jon McKane has gathered key bipartisan support for his bill to allow Maine residents to buy health insurance from out-of-state insurance carriers. The bill, LD 290, is scheduled for a public hearing before the Insurance and Financial Services Committee on March 16.

Rep. McKane (R-Newcastle) said the bill would reintroduce insurance competition in Maine and save consumers and businesses significant sums of money. “Maine’s insurance disaster has gone on long enough,” he said. “Our insurance rates are the second-highest in the country, and they have become a crushing burden for businesses and individual citizens. There’s no reason the people of Maine should be held hostage to a dysfunctional insurance system.”

According to Rep. McKane, Maine’s insurance mandates, especially community rating and guaranteed issue, have conspired to drive insurance companies out of the state. “The resulting lack of competition and a captive population,” he said, “have given us rates that are often two or three times higher than in neighboring states, for identical coverage.”

The bill is entitled “An Act to Allow Maine Residents to Purchase Health Insurance from Out-of-state Insurers.” It permits regional insurers to offer their individual and group health plans for sale in Maine, provided those insurers meet certain requirements of Maine law, including capital reserves and grievance procedures. The bill defines regional insurers as those authorized to operate in Connecticut, Massachusetts, New Hampshire, Rhode Island and Vermont.

Five of the bill’s 11 cosponsors are Democrats, including Sen. Bill Diamond (D-Cumberland), the Senate chair of the Appropriations Committee; and Sen. Lisa Marrache (D-Kennebec), a physician who serves on the Health and Human Services Committee.

Rep. McKane said opening up Maine’s insurance market would double as an economic development stimulus for the state. “You have to consider things in context,” he said. “We have some of the most costly electricity rates in the nation, and our tax burden is also one of the highest. Then our health insurance rates are number two in the nation. When you combine all these factors, you’ve got a formula for failure. That’s why our business climate is rated almost dead last in the entire country. If we want economic growth and job creation in the state, we need to make some changes.”

Rep. McKane said most states have already acted to remove destructive mandates to keep their insurance rates more affordable. “Here in Maine, we worry a lot about the safety net and we spend billions of dollars on Medicaid,” he said. “But we never consider the people up on the trapeze. It’s a high-wire act to support a family or a business in Maine, and the cost of health insurance is way out of line. This bill will provide significant relief.”

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