Report Reveals Reason for Small Business Rate Hikes

Health Insurance Industry Gave Heavily to Supporters of Bill

Last month, a report from Consumers for Affordable Health Care showed the effect of Public Law 90, the health insurance rate hike bill. It documented that 90 percent of small business owners have already experienced premium increases, with small businesses in rural areas and older employees the hardest hit.

Today, a new report from Maine Citizens for Clean Elections gives us a better sense of the cause for this legislation: a massive investment of campaign contributions from the insurance industry to the campaigns and PACs of candidates who voted for the bill.

“Small business owners are the heart of Maine’s communities and our economy, but this report makes clear that they don’t have the political power of Anthem and the other large insurance companies,” said Maine Small Business Coalition Director Kevin Simowitz. “This is a jobs issue. These rate hikes mean that some employees are laid off and many more aren’t hired.”

Don Hanson, owner of Green Acres Kennel shop on Union Street in Bangor, saw a 23.2% increase last year, and that was after he substantially downgrading his plan and increasing his deductible. When one of his employees opted out of the plan due to the increased cost, the insurer recalculated their offer on the last day of the year, further increasing the cost and giving Hanson only one day to talk to his employees.

"We hear all of this talk from the LePage administration and the current legislators about how important small businesses are to Maine, yet as a Maine small business person I feel like the governor and Maine State Chamber of Commerce are working against me more often than not. Like most small business owners I am an employee of my small business and know that what is good for my employees is good for me, but that's not how they see it. I cannot express how disappointed I am that the insurance industry has so much power and money to influence elections and the decisions made by legislators that are supposed to be working for the public good. Small business, our employees and families, shouldn't be treated like cash cows for the insurance industry," said Hanson. “I’m disappointed that my State Senator, and Representative voted in favor of this legislation and I will remember that when I vote this year.”

Read the report here.