MECEP’s analysis at the time cautioned lawmakers to consider the adverse consequences for older Mainers and those in rural areas, particularly small businesses.  We reached out to legislators on both sides of the aisle and offered to explain our analysis and the implications of this proposal for their constituents.  None of the bill’s proponents took us up on our offer.  They seemed unwilling to consider any information that might challenge their assumptions or the merits of this proposal.  They even refused to let the Bureau of Insurance comment on the proposal.

MECEP insists on credible research and analysis and found the rush to enact this rollback of Maine’s health insurance consumer protections very troubling.

Now, a new report (“The Impact of PL90 on Maine’s Health Insurance Markets”), commissioned by the Maine Bureau of Insurance as an independent analysis, has confirmed exactly what MECEP predicted.  Today, the Legislature’s Joint Standing Committee on Insurance and Financial Services is holding a hearing to consider the results of this study by Gorman Actuarial.

In anticipation, MECEP and our partners at Consumers for Affordable Health Care (CAHC)  prepared a comparison of what proponents of PL90 said about the law during the 2011 legislative deliberations and the conclusions of the new report to demonstrate that many claims by PL90’s supporters were mistaken.

The evidence clearly shows that PL90 gives too much power and profits to private insurance companies, undermines important consumer protections, and fails to address the issues that result in out-of-control health care costs.  It is a flawed law that the Governor and the Legislature must act to fix it.

Not all jobs estimates are created equal (or deserve equal status in the eyes of policy makers and the media).  MHPC’s assertion is flawed out of the gate.  It assumes the necessity of new taxes and ignores the fact that rolling back recently enacted tax cuts would go a long way to closing the shortfall with little or no additional economic impact.  Since the tax cuts have yet to take effect, delaying their implementation or eliminating them entirely would simply preserve the status quo.

Even operating on MHPC’s unfounded assumption, how would we credibly evaluate the impacts of a tax increase?

For starters, who will the tax increase affect?  Is it rich people, poor people, or everyone across the income spectrum?  Is it businesses or individuals?  Is it a temporary tax, as was used to cover a budget shortfall during the McKernan Administration, or a permanent tax increase?

The answer to these questions has a significant impact on the outcome of the analysis.  Where taxes are concerned, not all cuts or increases are created equal.

For example, providing tax relief to low- and middle-income households generally does far more to increase economic activity than tax relief for wealthier households. Low-and middle-income households are more likely to spend their tax cuts than wealthier households that tend to put more of their money to savings.  Many nationally recognized economists such as Mark Zandi (former advisor to John McCain) and Douglas Elmendorf, Director of the Congressional Budget Officehave written about these issues and provide informative analysis of a range of policy options in supporting economic recovery and the appropriate methodology for assessing those options.

Since MHPC does not specify the kind of tax increase its analysis addresses, the results are smoke and mirrors, not substance.  A 10% surcharge on households with incomes over $250,000 would have very different economic impacts than a penny increase on the sales tax or a $1 increase in cigarette taxes for example.

CBO Analysis of Job Impacts of Various Federal Policy Proposals

MHPC further undermines the credibility of their analysis by asserting that $121 million in new taxes will actually result in $631 in lost personal income per household over the long-term.  This is quite a leap of faith predicated on a host of assumptions, none of which are made clear.  Presumably MHPC is assuming that the tax increase would be in effect in perpetuity – which likely would not be necessary since the revenue shortfall is due in large measure to a dramatic drop in revenues resulting from the recession and ill-conceived tax cuts yet to take effect that further compromise Maine’s revenue picture.

MECEP takes our commitment to provide credible research and analysis seriously.  In estimating the job losses associated with the proposed DHHS cuts, we erred on the side of caution given the lack of specific information from the Administration.  We also generated figures based on our best understanding at the time of which program areas would be impacted.   We did not make hasty assumptions about other potential job losses associated with the Administration’s proposal such as cost shifting, poorer health outcomes, and lost productivity.

With the health and well-being of tens of thousands Maine children, families, seniors, and disabled individuals at stake, it is critical that policymakers base their decisions on fact not ideology.

The (Biddeford) Journal Tribune weighed in with a 12/16/2011 editorial labeling the proposal to deny MaineCare coverage to childless healthy young adults “offensive.”  “Those ‘healthy young adults’ are some of the hardest hit by the recession, as recent college graduates are struggling to find work. The unemployment rate for those age 20-24 has hovered around 15 percent for the past few months, and for those age 25-34 the rate has been between 9-10 percent – compared with rates between 6-8 percent for those 35 and older, according to the U.S. Department of Labor.”

In a 12/18/2011 editorial entitled “Our View: Doctor LePage offers wrong cure for DHHS” the Maine Sunday Telegram (MST) issued a scathing assessment of the LePage Administration’s nearly $220 million in proposed cuts to the Department of Health and Human Services (DHHS) budget.  “If Gov. LePage were a doctor, he might be sued for malpractice: He has not only prescribed the wrong medicine for a budget shortfall in Maine’s health care safety net, he has diagnosed the wrong disease.”  And MST columnist Bill Nemitz reports on a Maine Council of Churches effort to call attention to the moral questions raised by the proposed cuts.

An editorial in this morning’s (12/19/2011) Bangor Daily News (BDN) lays responsibility for the DHHS budget shortfall squarely at the feet of the LePage Administration and suggests a political motive.  “Miscasting a budget problem in order to quickly make changes to fulfill an ideological agenda is politically disingenuous. Doing so at the expense of the state’s most vulnerable people — without plans to help them and their families through the changes — is callous.”

Bangor Daily News

News

LePage’s proposed MaineCare cuts leave some reeling, others hopeful (12/8)

65,000 MaineCare recipients to lose health coverage under LePage plan (12/7)

Editorial

Safety net should be shrunk, not shredded (12/8)

Op Ed

Governor’s budget mismanagement will hurt poor and elderly (David Farmer) (12/8)

Portland Press Herald

News

LePage proposes dropping 65,000 Mainers off Medicaid (12/7)

Editorial

Our View: LePage’s MaineCare plan no way to cut costs (12/8)

Kennebec Journal

News

Chance for MaineCare overhaul may not last (12/8)

(Lewiston) Sun Journal

News

Battle lines drawn on LePage’s DHHS cuts (12/8)

Local agencies react to LePage plan (12/8)

‘It will have a real impact’: LePage announces sweeping changes to MaineCare (12/7)

Editorial

Region’s health should be asset to New England (12/7)

An evaluation of public benefits, private insurance (12/6)

MPBN 

Democrats: LePage Plan Will Shift Medicaid Costs to Private Insurance and Hospitals (12/8)

MaineCare Recipients Unsure Where to Turn as Coverage Loss Looms (12/8)

LePage Proposes Deep Cuts in Medicaid (12/7)

Advocates for Poor Decry LePage’s Proposed Medicaid Cuts (12/7)

WABI-TV
Governor Proposes Big Changes To Medicaid Amidst Budget Shortfall (12/7)

WCSH-TV/WLBZ-TV
LePage calls for Medicaid cuts to bridge gap (12/7)

Strimling & Harriman on Medicaid cuts (12/7)

WGME-TV

Organizations voice concerns about proposed DHHS budget cuts (12/8)

DHHS Proposed Cuts (12/7)

Portland Press Herald

Op Ed

Maine Voices: Programs for young children important to maintain (James H. Maier, M.D.)

(Brunswick) Times Record

Editorial

Best for business development

R&D investments pay dividends

Op Ed

GOP’s insurance plan is reckless (State Representatives Anne Graham and Alex Cornell du Houx)

‘Big dreams and vigorously pursued visions …’  (Tom Settlemire and Angela Twitchell)

Rail is poised for a revival (Doug Rooks)

In a 1/7/2011 op ed column in the Portland Press Herald entitled “Maine doctors want to improve Affordable Care Act, not repeal it,” Maine Medical Association President Dr. Jo E. Linder reported that the MMA recently surveyed its members and found that fewer than 15% favor ACA repeal.  “Going backward should not be an option,” she writes. “Let’s keep the ACA and work to amend those parts of it that need fixing.”

And in a 1/8/2011 op ed in the Bangor Daily News entitled “Time to stop denying Affordable Care Act,” Maine Council of Senior Citizens President John Carr details many of the important new benefits the ACA provides to Medicare recipients.  “Seniors and all Mainers will be better served if we channel our energies toward implementing the ACA, making sure Mainers fully realize its benefits and putting the health of our residents ahead of politics and profits,” Carr writes. “It’s time to stop trying to deny care and join together to make this landmark legislation work for all Mainers.”

Portland’s WGME-TV (CBS, Channel 13) reported on 12/1/2010 that Maine Congresswoman Chellie Pingree is leading the fight in the U.S. House to extend these unemployment benefits.  “”Are we going to extend tax cuts for the rich, giving millionaires an average tax break of over $100,000? Or are we going to continue unemployment benefits of about $245 a week for out of work Americans?” Congresswoman Pingree asked her colleagues in a speech on the House floor.

In an “op ed” column entitled “Get behind health care” in the 12/2/2010 edition of the Bangor Daily News, Joe Ditre, Executive Director of MECEP partner Consumers for Affordable Health Care labels rhetoric calling for the new Governor and Legislature to dismantle Maine’s groundbreaking Dirigo Health Agency (DHA) “counterproductive.”  He writes “The facts speak for themselves — DHA insures more than 14,000 Mainers who would likely not have access to insurance, they have insured another 38,000 who would have lacked health insurance, and recently added subsidized coverage for small and large businesses with part-time workers as well as for uninsured people with pre-existing conditions. The fact that the agency did not increase its rates for individuals and limited its small-group rate increase to 2 percent is a clear indication that it is an affordable option to a less than equal, competitive playing field in Maine.”

In his Saturday (November 20th) column in the Kennebec Journal and Morning Sentinel, Communications Coordinator Mike Tipping of MECEP’s partner organization The Maine People’s Alliance asks the big question that Congress must answer before the end of the year: “Jobless benefits extension not OK, but tax cuts for the wealthy are?”

In an “op ed” today (Monday, November 22nd) entitled “Thanksgiving hardships show that job crisis continues” in the Bangor Daily News, Julie Grab a retired teacher from Old Town who is also a member of the Worker Rights Board of Eastern Maine and Food AND Medicine, writes “The government must do its part in providing immediate aid to help people in crisis by extending unemployment insurance and the Temporary Assistance for Needy Families emergency fund, while also launching programs that will create jobs.”

The Bangor Daily News also chimed in with a timely editorial on the failure of Congress to extend unemployment benefits while pushing forward with tax cuts for the superrich entitled “Working Class vs, Wealthy.”

In an editorial today entitled “Power Rates in Perspective,” the Bangor Daily News concludes that “while electricity costs are high here, the trend is in the right direction.”

Provisions to eliminate lifetime benefit caps and introduce tax credits for small businesses that provide health insurance start immediately.  Others like the individual mandate and health insurance exchanges won’t take effect for another four years.  That is a huge challenge confronting reformers.

In 2003, Maine created Dirigo Health, one of the most significant health reform initiatives by any state.  Like the current national reform, several key Dirigo provisions took time to implement.  Opponents used this transition to undermine program support and chip away at its scope and impact.

National reform advocates should heed Maine’s experience.  While passing comprehensive legislation was a monumental accomplishment, maintaining its integrity may be an even greater challenge.

Maine is well-positioned to realize significant benefits from national reform.  Since many of Maine’s consumer protections mirror provisions in the new federal law, opponents can no longer argue that Maine is at a competitive disadvantage with other states.  Other provisions in the new federal law will complement Maine’s efforts to modernize our health data system and reform the way we pay for health care to address both quality and cost.  Because we have already expanded MaineCare eligibility and created DirigoChoice, the state can more rapidly deploy federal funds to improve Mainers’ access to affordable coverage.

Maine is at the forefront of comprehensive health care reform.  The landmark reforms Congress just enacted affirm Maine’s efforts and increase the likelihood they will flourish.  But reformers at the state and national level must remain vigilant and continue to work together to deliver quality, affordable health care for all.