Maine’s certificate need laws keep healthcare costs high
According to the Maine Bureau of Insurance, Mainers can expect to see increases of as much as 25% in health insurance rates beginning in 2026. While Maine already has some of the highest health insurance costs in the country, insurance providers claim the rising cost of health care is forcing their hand. To combat the anticipated rise in insurance costs, Maine legislators should remove barriers to competition to drive down the cost of healthcare.
One obvious way to do so is to repeal the state’s restrictive certificate of need (CON) laws. A CON is, as a recent report by Pacific Legal Foundation explains, essentially a government-mandated permission slip to open or expand new facilities. In many states, without a CON, healthcare providers can do nothing.
In Maine, hospitals and other healthcare providers must prove to the government that there is a public need before opening new locations or expanding their services to care for more patients. But Maine doesn’t stop at just one needless burden for healthcare providers. The state also allows existing providers to object to their competition receiving a needed CON — sometimes referred to as the “competitors” veto. This effectively allows large and powerful hospitals to block any competition from entering Maine’s healthcare market.
It isn’t difficult to see how this impacts healthcare costs—it’s economics 101. Restricting supply drives up costs. And when it comes to CON laws specifically, Economists Jon Ford and David Kasserman explained roughly thirty years ago that “the economic effect [of CON laws] is to shift the supply curve of the affected service back to the left,” and “the effect of such supply shift is to raise . . . [the] equilibrium price.”
“But without CON laws, hospitals in rural areas will disappear.” This oft-repeated objection by CON supporters misses the mark. Despite what supporters might claim, states with CON laws have around 30% fewer rural hospitals and 13% fewer rural ambulatory surgical centers. And patients in these states have to travel further distances to receive care and pay a higher cost for their treatment.
The truth is CON laws are causing increased prices and lack of available care in rural and urban areas alike. And as Maine is finding out the hard way, this has a direct impact on the cost of insurance. Repealing these unnecessary and burdensome laws is the best way to reintroduce competition into Maine’s healthcare market and drive down costs. Cheaper healthcare means cheaper insurance.
While repealing CON laws isn’t a cure for all the problems with healthcare, it is a step in the right direction that can ease the financial burdens carried by patients. But legislators in Maine don’t have to take our word for it, roughly 4 in 10 Americans live in states with no or minimal CON laws, and the research suggests they are better off than those in states with robust CON programs.
Fortunately, the tide is turning against restrictive CON laws across the country. Several states have recently come to realize the negative impact CON laws have on their health care markets and decided to make changes. In 2023, South Carolina repealed CON laws for every health care sector except for nursing homes with significant positive impact; almost immediately after the University of South Carolina announced plans to build a major new hospital and the state announced plans to build a new residential psychiatric treatment facility for juveniles. And in 2025, both D.C. and Vermont loosened their CON laws.
A 25% increase in health insurance premiums is no small matter. But Maine legislators can’t expect health insurance providers to bear the brunt of increased costs out of the kindness of their hearts; that’s what’s known as a pipe dream. Instead, Maine legislators should immediately begin working to repeal the state’s CON laws. The citizens of Maine shouldn’t have to pay the price for an overly restrictive, anti-competition healthcare market.
