Maine's Dirigo Health Reforms
In June 2003, Maine Governor John E. Baldacci signed into law the Dirigo Health Reform Act, with the goal of providing all Maine's citizens with access to healthcare by 2009. The Governor's hopes for the plan are high. "Our goal is quality care for everyone at a price we can afford." The Governor wanted Dirigo to control costs, improve the quality of healthcare and extend insurance coverage a tall order.
The act included measures to control hospital and health-care costs and created a new health plan, DirigoChoice, which provides discounted health insurance coverage to Maine businesses with 50 or fewer employees, the self-employed and individuals. DirigoChoice operates on a sliding scale. Enrollees obtain a comprehensive policy from Maine's largest insurer, Anthem Blue Cross/Blue Shield, but pay what they can afford according to an income index. The difference is covered by the state. About 8,000 Mainers are covered under DirigoChoice. The legislation included plans to expand the program to larger companies.
How was Maine supposed to pay for all of this? The state paid $53 million to launch the program. Further funding was to be found from the cost savings by Maine's hospitals and to insurance companies from fewer E.R. trips by the uninsured among other savings. The plan called for an evaluation of those savings and then for the insurance companies to pay that cash back into the Dirigo system.
Maine's independent insurance commissioner did evaluate the program, calculating that $43.7 million had been saved since the program started. Hospital budget reforms appear to account for much of the total, in part because far fewer people have taken advantage of Dirigo than the Governor anticipated, 8,000 instead of 30,000.
The Governor contends that those savings benefited the insurance industry and has called for payment. The insurance industry counters that the assessment is erroneous and contends that if they are made to pay the $43.7 million bill, they will pass the costs on through higher premiums for consumers constituting what the plan's opponents call "The Dirigo Tax". The Maine Association of Health Plans has filed lawsuits challenging a $43.7 million assessment, contending it is "arbitrary or capricious," and that any savings they have seen are outweighed by the fee.
The original version of the Dirigo Health bill prohibited insurance companies from passing on those costs though higher premiums. That languages was taken out during negotiations current language in the bill asks companies to "use best efforts." There is a piece of legislation now in front of the state legislature, L.D. 1935, which would prohibit this "pass-through" of costs to consumers.
According to the Governor's Web site, "Dirigo Health won unanimous support from the Joint Select Committee on Health Care Reform and 2/3 majorities in both chambers of the Legislature." But support for the plan is not quite as overarching today. Indeed, as the Governor faces re-election, Dirigo has emerged as a major campaign issue.
Read more about the plan, and the debate, below.
|Dirigo Supporters:||Dirigo Opponents:||Dirigo Health has achieved its goal of reducing the growth of health care costs. Maine's superintendent of insurance recently ruled that Dirigo Health saved Maine's health care system $43.7 million in the past year.
His decision came after months of negotiations between stakeholders and a comprehensive hearing in which the savings were scrutinized by industry lawyers and accountants.
The savings are there. The issue now is who will benefit from them. Insurers are saying they can't capture the savings. We need to pressure them to do their job as insurers and negotiate rates with hospitals that reflect the savings.
- "Dirigo critics show disrespect for Mainers,"
Sen. Michael Brennan and Sen. Arthur Mayo
|We are being forced to pay even more, to subsidize the governor's "signature issue" - Dirigo Health...But insurance industry officials, claiming they cannot "absorb" the fee, say they will pass it on to customers as higher premiums. In light of these disturbing developments, it is time to repeal the Dirigo tax and perhaps find another way to fund the program. If the tax is unacceptable to the governor, it's clearly going to be unacceptable to Mainers, who will rightfully ask how the governor expects to lower the cost of health insurance by imposing a new tax on it.
- ""Repeal excessive Dirigo tax on insurance," Rep. Kevin Glynn
| Under the original compromise that established the Dirigo Health Program, those savings are to be captured ...and put into discounts on health care coverage in order to provide Maine's hardworking small business owners and working families with increased access to affordable quality health care.
Now Maine insurers want to break that agreement by refusing to share the savings with the people of Maine. They are attempting to pocket these savings as industry profit, and then bill consumers in the form of higher premiums.
- Consumers for Affordable Health Care
L.D. 1935 is discriminatory against one industry...The restrictions contained within the bill would be analogous to the Legislature passing a law that would prevent gas stations from passing along the gas tax to consumers. Such an action would be deemed unacceptable, as should L.D. 1935.
- Tarren Bragdon, The Maine Heritage Policy Center, testimony before the Maine State Legislatureís Joint Standing Committee on Insurance and Financial Services
More on Dirigo
The Commonwealth Fund
The Commonwealth Fund is a private foundation that aims to promote a high performing health care system. Their site contains a study "Focus Groups with Mainers About the Dirigo Health Plan." The National Academy for State Health Policy (NASHP), working for the Maine Governor's Office of Health Policy and Finance and with support from The Commonwealth Fund and the Maine Health Access Foundation, sponsored this study.
Consumers for Affordable Healthcare
The advocacy group Consumers for Affordable Health Care takes as its mission "to bring about a universal health care system that provides the full range of care for all Maine citizens, including preventive and primary care, acute and long-term care; is financed from a broad variety of sources...moderates the rising costs of health care."
Governor Baldacci's official site for the Dirigo Health Plan.
Maine Bureau of Insurance
The site includes the financial assessment of the Dirigo plan: Review of Aggregate Measurable Cost Savings Determined by Dirigo Health for the First Assessment Year
Maine Development Fund: Maine Health Care Performance Council
The Maine Development Fund was created by the Governor and Legislature in 1978 as a private, non-profit corporation with a broad mandate to promote Maine's economy. MDF is financed primarily with private resources. The site holds the MDF's report on Dirigo: Maine Health Care Performance Council Preliminary Report
Maine Health Forum
Franklin Community Health Network, a locally controlled, nonprofit, integrated network of rural health-care providers, created by Franklin Memorial Hospital in 1991. It's site collects and republishes health news, research, editorials and advisories.
Maine Heritage Policy Center
The Maine Heritage Policy Center "is a research and educational organization whose mission is to formulate and promote conservative public policies based on the principles of free enterprise; limited, constitutional government; individual freedom; and traditional American values." Among their online coverage of Dirigo are the proceedings of conference on Dirigo and a report "Eight Challenges for Dirigo Health in 2006." (PDF)
Maine Office of Health Policy & Finance: Dirigo
The Governorís Office of Health Policy and Finance's information site for Dirigo. The site also tracks implementation of Dirigo Health Reforms and maintains a list of public meetings on the plan.
Maine State Chamber of Commerce
Get the official views of the Chamber on the Dirigo plan. The Chamber has filed an appeal of the order of the Superintendent of Insurance, approving $43.7 million in savings under the Dirigo Health program.
A site focused on Maine health containing news coverage, legislative proposals, editorial viewpoints, FAQs, links and discussion boards created by a number of Maine newspapers.
National Academy for State Health Policy
The National Academy for State Health Policy is a non-profit, non-partisan organization dedicated to helping states achieve excellence in health policy and practice. The organization has offices in Portland, Maine, and Washington, DC. NASHP provided policy support to the architects of Dirigo.
No Dirigo Tax
This anti-Dirigo coalition and site "was established by a group of concerned Mainers dedicated to helping save our quality healthcare system."