MECEP Case Study

In 2019, the Maine Center for Economic Policy (MECEP) issued an economic analysis for a state-based universal health system that would cover all Maine residents. This study was contracted by Maine AllCare. The MECEP model left federally funded programs intact and provided a state-run program to cover the uninsured and those covered by private insurance.

The MECEP model assumed contributions from both employers and individuals. It also assumed there would be no fees collected at point of service i.e. no co-pays, deductibles and max-out-of-pocket expenses.

The employer contribution is a percentage of payroll that varies depending on its number employees. Businesses with fewer than 10 employees would pay 3% of payroll and this steps up to 10% for businesses with over 100 employees.

The individual contribution is an annual baseline premium of $6000 for a person 21 and over and $3500 under 21. The baseline premium is reduced on a sliding scale for people earning under 600% of the federal poverty level (FPL).

This case study looks at the economic impact for a small business in Hancock County, using assumptions from the MECEP model.

The business has six employees and does not provide healthcare coverage. Three of the employees are currently covered under ACA plans with varying levels of federal subsidies*. Two employees (and their families) are covered by MaineCare and one is uninsured.

Based on their 2020 W3 tax form, the employer annual contribution under the MECEP model would be $3,953 (3% of $131,763.) The MECEP model assumes that Worker’s Compensation premiums ($1,234 in 2021) would be cut by 50%. This reduces the net yearly business contribution to $3,336.

The three employees covered under ACA plans would fare as follows:

ACA monthly premium $297 plus $5900 deductible / $7050 max-out-of-pocket
MECEP model $243 month (5.3% of $55,000 – 427% 2021 FPL)

2.Single + one child 21/$35K
ACA monthly premium $93 plus $3200 deductible/$6800 max-out-of-pocket
MECEP model $87.50 month (3% of $35,000 – 203% 2021 FPL)

3. Single/$30K
ACA monthly premium $93 plus $3200 deductible/$6800 max-out-of-pocket
MECEP model $87.50 month (3.5% of $30,000 – 234% 2021 FPL)

Two employees and their families are currently covered under MaineCare and the MECEP model assumes that they would pay nothing (same as current MaineCare recipients.)

One employee is currently uninsured and, based on his income, would pay $1600/year according to the MECEP model. (4% of $40,000 – 310% 2021 FPL)

*The ACA calculations are based on 2022 plans.