Maine Won’t Allow Out-of-State Insurance Purchases

Published July 1, 2009

The Maine House of Representatives has rejected a proposal to allow out-of-state health insurers to sell individual policies in Maine.

Supporters of LD 290, An Act to Allow Maine Residents to Buy Health Insurance From Out-of-State Insurers, offered the bill as an effort to expand residents’ health insurance options.

“All this bill is doing is offering people a choice,” said Rep. L. Gary Knight (R-Livermore Falls) on the floor of the House before the bill was defeated by an 82-63 vote. “We have a monopolistic situation now.”

LD 290 would have allowed policy writers in neighboring states such as Connecticut, Massachusetts, and Vermont to sell individual insurance policies in Maine. This would have helped reduce health insurance and health care costs while aiding Maine’s effort to reduce the number of uninsured, which currently stands at 140,000, according to Devon Herrick, Ph.D., a senior fellow and health economist with the National Center for Policy Analysis.

“This is an example of protectionism, pure and simple,” said Herrick. “Special interests for providers and advocates for specific diseases and treatments convince lawmakers certain benefits should be covered by all insurance policies, and the only way these special interests can foist their services upon consumers is if the state-mandated plans are protected from interstate competition.

“In other words, Maine’s consumers are the losers!” said Herrick.

More Choices ‘Desperately Needed’

“Maine individuals desperately need more choices among private health insurance carriers,” said Tarren Bragdon, executive director of the Maine Heritage Policy Center. “Individuals have essentially one carrier now, and small businesses only have three carriers from which to choose the best plan for their employees. Next door in New Hampshire, individuals select among 11 carriers, with small business having 14 options. In Connecticut, individuals have nine options, and 19 carriers compete for small business employees.

“With taxpayers paying 100 percent of the cost of health insurance for Maine legislators, it is particularly sad that a majority of legislators will not let their constituents have the same choices available to the residents of the other five New England states,” Bragdon said.

“It is unfortunate that the Maine legislature failed to respond to the citizens’ plea to be able to shop in neighboring states for health policies,” said Iowa State Rep. Linda Upmeyer (R-Garner), a cardiology nurse practitioner. “With virtually no competition for health underwriting in the state, and with 53 mandates on coverage, I can understand their desire to shop elsewhere for health insurance.

“States regulate insurance to be sure citizens are protected, but that often equates with overprotection, and people have few choices related to coverage,” Upmeyer said. “This was an opportunity to create a choice, increase access, and perhaps better meet the needs of the population.”


Joe Emanuel ([email protected]) writes from Georgia.

For more information …

LD 290, An Act to Allow Maine Residents to Buy Health Insurance from Out-of-State Insurers: