The Corner

Snowe’s Victimology

Sen. Olympia Snowe tells NRO’s Robert Costa, “I come from a state that has been a victim of the insurance industry.”

Wrong. In fact, the opposite is true. Maine mugged the insurance industry with a series of regulations passed in the early ’90s. Milliman, a consultancy, studied the effects of these reforms and concluded:

It is clear that the 1993 reforms reduced availability of coverage in Maine by driving almost all carriers out of the market, and that they contributed to increases in premiums. The uninsured portion of the non-elderly population remains similar to pre-reform levels. The Dirigo program has had trouble attracting a large pool of diverse risks, and at present falls far short of its goals of universal coverage, although it may have helped to reduce the high levels of uninsured that followed the 1993 reforms.

The Dirigo program is Maine’s version of the “public option,” a state-run insurance program that is going broke. I wrote about DirigoChoice for NRODT last month:

The skewed economics of DirigoChoice have left it highly dependent on government financing, which has created a series of problems for policymakers. The program’s initial funding mechanism was nothing short of bizarre: Each year, the Dirigo Health Agency had to come up with a number that (according to its experts) represented the amount of money DirigoChoice had “saved” the Maine health-care system; the law then required Maine insurance companies to pay that amount to the state. Needless to say, those calculations ended up being something less than rigorous, and the insurance companies objected. Employers argued that insurers were simply passing on the bill for these “savings-offset payments” to private policyholders. Last year, the furor over the payments led the agency to downgrade its savings estimate by $40 million, making the whole process look like an arbitrary sham.

The insurance industry objected to being regulated and taxed to death. That makes Maine the victim. 

The Democratic legislature tried to replace this funding mechanism with a tax on beer, wine, and soda, but Mainers exercised a “voters’ veto” and repealed this tax via referendum. Running out of money, the legislature went back to taxing Maine insurance companies (and, by extension, private policyholders), enacting a 2 percent tax on all paid insurance claims. The state also has capped enrollment in order to keep costs from spiraling further out of control. The program’s supporters are now looking to Washington for help. “We have a very limited capacity because of limited resources,” Maine Office of Health Policy and Finance director Trish Riley said recently. “With federal money, more people would become eligible and the federal government would require people to have coverage.”

Obamacare would save Maine from the consequences of its disastrous health-care policies by imposing those policies on the nation. Who’s victimizing whom?