Last session, the new legislative majority took bold steps to put Maine on a new path toward prosperity and opportunity. The primary focus was on creating more jobs and economic activity. Despite unprecedented economic difficulties and a $900 million budget shortfall, we were able to apply common sense solutions to Maine’s short-term problems, while adopting significant reforms that will help create a better future for all of us. Our efforts to transform state government included: regulatory fairness and reform; pension reform; welfare reform; paying outstanding debts (hospitals); elimination of fraud and waste (Maine Turnpike Authority); and a $150 million tax cut (the largest in Maine history) targeted toward job creation. To lower health insurance premiums for individuals, families, and businesses, we also enacted Public Law 90.

Public Law 90 —PL 90— is a market-based solution designed to ensure that everyone has access to health insurance that is more accessible and affordable. It seeks to fix a dysfunctional private insurance market that makes insurance unaffordable, hinders job creation, and leaves more than 130,000 Mainers without health insurance. Even though the new law has not been fully implemented, the Maine Bureau of Insurance is providing policy makers with initial data and analysis on PL 90’s impact on health insurance rates. The results are very encouraging, with some consumers seeing rate decreases for the first time in recent memory. In the limited instances where rates went up, the information that has been complied will guide our efforts to further improve the law this session.

The analysis provided by the Bureau of Insurance comes from one of two independent actuarial studies conducted by Gorman Actuarial, LLC to assess both the impact of the federal Affordable Care Act, and PL 90 on Maine’s health insurance markets. The Gorman report on PL 90 contains several positive findings, including:

* The individual market reinsurance program created by PL 90 may reduce individual market premiums 12 to 15 percent.

* In PL 90’s first year of operation, approximately 80 percent of the individual market will experience lower premiums than they would have had in the absence of PL 90.

* PL 90 reduces premiums by more than 20 percent for 30 percent of the market. Without the [provisions in PL 90], about two-thirds of the market would receive higher premiums.* PL 90 accelerates growth in the individual market. Enrollment may grow 6 to 10 percent before 2014 because of lower premiums. Moreover, since these market entrants most likely will be younger and healthier, they could reduce premiums across the board by 3 to 5 percent.

The report also contains good news in the small group market for companies with fewer than 50 employees. It estimates that in the first year alone, 84 percent of the members in this insurance market should benefit. The fact that for the first time there have been some premium decreases and smaller increases is even more notable when you consider what has been occurring nationally in the health insurance market. A recent Kaiser Family Foundation study showed that nationally, health insurance costs increased dramatically in 2011 compared to previous years.

We still need to find ways to lower rising health care costs, because they ultimately drive up the cost of health insurance. Another variable is whether or not the federal ACA is ultimately implemented; repealed by the next congress; or struck down by the U.S. Supreme Court next spring. We designed PL 90 to comply with the ACA if it goes into effect, or remain in place if the federal law is reversed. Either way, the Gorman study predicts that the number of uninsured will decrease significantly.

The legislature will be carefully reviewing the findings of both of these independent reports and other analysis from health insurance experts. The promising developments we are seeing at this early stage give us confidence that our health insurance reforms will benefit individuals, families, and businesses when fully implemented in 2014. We will continue to pursue common sense solutions to the problems that have plagued state government for years. Transforming state government in the midst of these severe economic times is difficult, but Maine’s future depends on all of us working together.

Senator Rodney Whittemore chairs the Insurance and Financial Service Committee. Whittemore represents Maine Senate District 26.