Maine insurance law could conflict with new federal rules

Maine Republican Gov. Paul LePage on Tuesday signed into law new healthcare rules that could conflict with federal regulations set to take effect in 2014.

Several states have passed or considered bills that explicitly disapprove of the federal healthcare reform law, but Maine’s new statute isn’t simply a political statement — it makes substantive policy changes to the state insurance market that a leading opponent says will have to be revisited in just two years.

For example, the new Maine law allows insurers to charge older customers up to five times more than younger ones. But beginning in 2014, the federal healthcare law will cap that ratio at three to one.

Sharon Treat, a state legislator in Maine and a member of the National Conference of State Legislatures executive council, said the state’s law presents several conflicts with new federal standards. The state will have to revisit provisions on rate review, she said, and might need additional legislation to fill gaps in enforcement.

The state’s insurance office has drafted a bill to amend the law that LePage signed Tuesday and bring it into compliance with the federal rules, Treat said. She said the office wasn’t given an opportunity to weigh in as the law worked its way through the legislature.

The state’s insurance superintendent, Mila Kofman, resigned her post Monday because of the bill.

The Maine law includes one of Republicans’ biggest healthcare priorities — the sale of insurance across state lines. It lets out-of-state insurers sell policies in Maine without getting a license there. But beginning in 2014, the federal law will require insurers to be licensed in every state where they want to sell coverage through a newly created insurance exchange.

So a company could still take advantage of the Maine law without violating federal law, but only if it’s willing to opt out of a new marketplace for individuals and small businesses.

Supporters say the new law will help spur competition and lower prices, especially for young, healthy residents.