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May 12, 2009 Jay Finegan, 287-1445
Rep. Jon McKane Goes on Offensive to Save Out-of-state Insurance Bill

AUGUSTA – State Rep. Jon McKane is taking the offensive to save his proposal to allow Maine residents to purchase health insurance from companies operating out of state.

To counter the expected arguments from opponents when his bill comes up for debate on the House floor, he plans to distribute a list of “red herring” objections and then refute them with the facts. Every member of the House will receive a copy.

Rep. McKane’s bill, LD 290, would permit Mainers to buy insurance from carriers in Connecticut, Massachusetts, New Hampshire, Rhode Island and Vermont. It was voted down 8-4 by the Legislature’s Insurance and Financial Services Committee on March 24 on party lines. As a divided report out of committee, it will come up for debate in the House, where Republican leaders are expected to ask for a roll call vote.

“This is a matter of giving Maine citizens freedom of choice,” said Rep. McKane (R-Newcastle). “This bill could save Maine families thousands of dollars every year. Everyone knows that Maine’s insurance system is broken, yet the majority party is determined to keep everyone handcuffed to it.

“This bill is very popular with consumers,” he added, “but that doesn’t seem to matter to the people ruling Augusta. They have no legitimate arguments against it, so they throw up lots of noise and static to get their way.”

The McKane fact sheet lists several red herrings that opponents may deploy to kill the bill. The first is that Maine consumers will be unprotected from unscrupulous out-of-state insurers.

“Consumers are protected when other items are bought out of state,” said Rep. McKane. “If a Maine resident purchases a car in New Hampshire, real estate in Vermont or legal services in Massachusetts, they are protected from unscrupulous business practices by existing law. Why would health insurance be any different? It wouldn’t.”

Another red herring is that Maine’s Bureau of Insurance will have no authority over out-of-state insurers. “Wrong again,” said Rep. McKane. “Out-of-state insurers would have to abide by Maine’s minimum capital and surplus laws, reserve requirements, disclosure and reporting requirements and grievance procedures. We can design the system any way we want.”

A third objection is that giving consumers the choice of where to buy coverage would cause a health insurance death spiral. “It’s too late for that one,” Rep. McKane said. “The death spiral began a long time ago with the implementation of the ‘consumer protections’ of guaranteed issue and community rating. Thousands have dropped out of the individual insurance market since then. We need dramatic action now.”

Rep. McKane said his bill stems from a simple fact: Maine people pay too much for health insurance. “By joining together with the other New England states, we would be part of a huge insurance pool and would have the advantages of much more competition,” he said. “We would have all of the consumer protections that these states offer, as well as those we wish to impose.”

He said constituent surveys by House Republicans consistently find that more than 90 percent of Maine residents want the right to buy health insurance coverage out of state. Also, the Lewiston Sun Journal recently published an editorial in favor of the legislation, writing, “There are details to be worked out, but the principle is sound.”

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