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  • Free Market Reforms Rescue Maine from Obamacare-Like Problems

    Maine’s new market-based health care reform is bringing insurance premiums down by as much as 60 percent in the individual market.

    Elected in 2010, Governor Paul LePage (R) made health reform a top priority and signed Maine’s new reform into law in May 2011. Shortly thereafter, he stated, “I believe that common sense, personal experience, and our nation’s collective experience show that the private sector is superior to the government sector. It is time that we reverse course, create a more competitive marketplace, and make a healthier health care market.” After just one year of implementation, building reform around those principles has proved successful.

    But Maine’s reform success comes after years of ever-increasing premiums and damaging reforms. In 1993, the state legislature enacted a law with components that were similar to provisions currently in Obamacare, such as community rating and guaranteed issue. These regulations caused the number of people insured in Maine’s individual market to drop by 44 percent from 1993 to 2009.

    Writing for Heritage, Tarren Bragdon and Joel Allumbaugh explain:

    The cause is clear. When guaranteed issue and narrow community rating took effect, premiums and deductibles skyrocketed. Essentially, insurance became priced for—and therefore only attractive to—the oldest and sickest enrollees. The young and healthy dropped coverage, leaving fewer and sicker enrollees.

    In October 2011, Maine began implementing free market-based reforms that doubled the variation in premium costs allowed for different age groups. This encourages younger and healthier individuals to enter the market, which lowers costs. The Wall Street Journal illuminates the savings on an individual basis:

    According to the Maine Bureau of Insurance, a married couple age 40 to 44 with one child will pay $1,919 a month for a policy with a $2,250 deductible in 2013 if they choose to re-up their current policy. If the same family switches to the new health plan, or buys the plan for the first time, their premium will fall to $920, a 52% decrease. A couple over 60 could buy the same policy for $1,290, down from $2,466 under the old system. Or a young adult 25 to 29 could buy a high $10,000 deductible plan for catastrophic expenses for $232, previously $665.

    In addition, Allumbaugh expects new insurers to enter the more friendly market, increasing competition and driving costs down even further in the future.

    Maine’s story serves as a twofold lesson, as Bragdon and Allumbaugh write:

    Maine’s experience with the costly failures of a big-government, command-and-control approach to health care reform is a salutary warning of the likely adverse effects of similar provisions in Obamacare. In contrast, Maine’s new approach to health care reform shows other states and Congress how to chart a better course toward more innovative and effective health care reform using proven patient-centered, market-based designs.

    Will Obamacare make America learn the hard way, or can we learn from Maine’s mistakes and repeal Obamacare?

    Posted in Featured, Obamacare [slideshow_deploy]

    7 Responses to Free Market Reforms Rescue Maine from Obamacare-Like Problems

    1. Bobbie says:

      Insurance at cost goes to the insured that pays. Fair and equal. Independent oversight will insure no fraud or corruption. In fed government control it goes to fraud and corrupt at a higher cost with foreseeable consequences and crisis' with the lack of responsibility government holds. The answer is always the free market. Getting people to take on their personal/parental responsibilities is always diverted by democrat manipulation. If one can't pay the full cost, they can always do dishes, or some other menial task for the services rendered and appointed by the 'renderer. Unfair is higher costs to my family paying for our personal health issues while the costs we pay also goes to the issues of others who by democrat pampering, think they have a right expensing their personal costs on us! Repeal unconstitutional OBAMACARE effecting livelihoods in a sickly way…

    2. georgezgirard says:

      This special program was launched in 2010 and was originally expected to run out of money before it could cover everyone who needed it. But the opposite happened. People with pre-existing conditions either didn't know about this plan or didn't care to take part. Less than 20,000 people have signed up across the country. learn at "Penny Health" for your self

    3. Steve IU says:

      This is the best proof of what many have argued in theory and could have a very positive benefit in the battle of ideas based on free market vs. the progressives government driven solutions.

      I can not think of anything I have read in the past year or more that has the potential benefit that this has for winning that battle and saving our country from going the way of the social democrats in Europe.

    4. BernardMohr says:

      If you are interested in going beyond ideology, here are the real facts. I operate a small company in southern maine.
      In 2012 our insurance premium went up 17%. It would have gone up even more had we not increased our deductible.
      FYI – we purchase insurance through a national small business broker.
      I have spoken with several small businesses in Maine – they all have had similar experiences to mine.

    5. @SueDinNY says:

      I think it's great that health costs in Maine are going down (if they are really going down and we're not reading another propaganda article) but paying $1,200 for insurance is still too way much for the average family. Remember – the average pay is around $45,000. Premiums needs to be down to around $300 monthly for small businesses and uninsured people and that won't happen. Major medical policies are needed which cover major expenses where people pay out of pocket for doctor visits. That way they can be insured for the unexpected.

    6. Hi there! I could have sworn I’ve visited your blog before but after looking at a few of the posts I realized it’s new to me. Nonetheless, I’m certainly pleased I came across it and I’ll be book-marking it and checking back often!

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