I read with interest in the April 16 edition of the St. John Valley Times of how the University of Maine at Fort Kent is looking at a tuition rate increase in the range of 4 to 7 percent. Although they plan a 2 percent salary increase, the 17 to 18 percent health insurance increase is a major factor in the tuition increase.

About a month ago, Maine Public Service filed for an electrical rate increase on the basis of increasing health insurance costs for its employees. Recently, Fraser Paper Co. announced the permanent layoff of more than 300 of its employees due to the lack of profitability by the company.

I suspect one of the costs which has eroded the company’s profits is the continuing increase of health insurance. Every small business owner knows what kind of problem health insurance increases have been over the past five to 10 years. It has come to the point that the only employers who are able to offer substantial health benefits are those who are either bound by union contract or those who can pass it on to the general public (like Maine Public Service) or to the taxpayer in the case of local and state governments, schools, universities, and so forth.

To blame this problem on the health insurance companies is not fair. All the insurance company does is take money from premiums collected to pay the health care bills incurred by the subscribers. The true culprit is the cost of health care as billed to the insurance companies by hospitals and others. The insurance company is nothing more than a hired bill payer. The more bills you have and the higher they are, the more money the insurance company needs from you to pay those bills.

We have to ask why the hospital bills are so high. One of the many reasons for this is there are more older people who use more health care services. Many of these older people rely on Medicare and MaineCare (formerly Medicaid) to pay for their health care. Unfortunately, Medicare and MaineCare do not pay the regular full price to hospitals, doctors and nursing homes. They pay much less. Medicare is run by the federal government and MaineCare is run by the state government. As governments, they pay only what they think is enough, even if it is not.

The fact that the federal and state governments pay less than the full cost for health care services rendered to their beneficiaries forces the hospitals and other health care providers to pass these losses on to those patients with health insurance. This essentially is a hidden tax placed upon those with health insurance. The governments are shirking their financial obligation, thereby forcing those with health insurance to pick up costs which should have been paid by the governments to begin with. We can do something about this by insisting that our elected state and federal representatives mandate that the governments pay the full costs of providing health services to people under Medicare and MaineCare. When governments argue that they do not have enough money to pay the full costs, my reply is that they should not promise to give so much to so many if they do not have the funds to pay for it.

Governments have to be held accountable to pay for the full cost of the health services they buy. Health care is the only government assistance program that I know of where they do not pay the full cost normally charged to the public. When an individual with food stamps (government assistance to purchase food) goes to the store to purchase groceries, they pay the same price as everyone else. When individuals with heating oil assistance receive their payment vouchers, the heating oil dealer sells to them at the same price as he does to everyone else. Why is health care any different?

As a nursing home administrator, I am very aware of the government paying less for health care services than what it actually costs to render those services. For more than 20 years, nursing home payments have been held to that of inflation. Recently, our 2 to 3 percent annual increases have been dropped to less than 1 percent and are scheduled to be zero percent for next year.

Our costs for taxes, utilities, food, supplies, and so forth, are largely beyond our control. Any of those which increase more than inflation has to be made up by paying employees less than inflation or eliminating employee positions altogether. We are forced to choose between reducing services or operating at a loss.

Occasionally, nursing homes are cited for not providing the best quality services expected. Have you every tried to serve meat on a macaroni and cheese budget? Nursing homes have done an outstanding job when considering the meager payments they receive. We also have been hit by 18 percent health insurance increases while our government funding only goes up 1, 2 or 3 percent at best. Our employees have had to carry the majority of the premium increases causing some of them to drop insurance coverage altogether.

When those without insurance go to the hospital and have no means of paying for services, the losses are passed on to those with health insurance (just like the Medicare and MaineCare losses). This causes the health insurance premiums to increase even more for those who are still able to afford it. It is a vicious circle which is getting worse every year. It is like a large snowball rolling down a hill getting larger as it goes. The only way it is going to slow down or stop is for the state and federal governments to pay in full the cost of health services it has promised to its beneficiaries.

As long as governments continue paying less than full health costs, insurance premiums will continue to increase at 18 percent a year, which in turn will cause more people to drop their health insurance. I ask you to contact your elected representatives and request they make this a priority. If their reply is that the government does not have the money, then they have to look at curtailing the eligibility for these programs so that only the number of people whom the government can afford to pay for in full actually receive the benefits.

We need to make some noise about this and demand more action from our politicians.

Philip A. Cyr is administrator of the Caribou Nursing Home.