How Risky Is Maine’s Single-Payer Plan?

Published October 1, 2003

Was passage of Maine’s Dirigo Health plan the right solution for the state’s health care woes?

Risk theory suggests that before one enters into a risky venture, the upside of success must be greater than the downside of failure. For instance, a risk-benefit analysis would conclude it makes no sense for an amateur to leap off the cliffs at Monaco on a dare by friends. But the very same leap, made by a professional before thousands of reporters and news cameras, could be deemed wise through risk-benefit analysis.

In the case of Dirigo Health, the May 5 proposal first issued by Health Reform for Maine made little sense. The risks were far too great for the rewards. While some 180,000 Mainers would have become eligible for health insurance, and while the federal government might have paid toward insurance coverage for certain employees, especially in small businesses, overall health access would not have been significantly improved by the plan. Moreover, no evidence was offered that the Health Reform for Maine proposal would have improved mortality, longevity, or quality of life.

The downsides included government takeover of the state’s largest “industry,” the closing of up to eight rural hospitals, an insurance premium tax increase, loss of competing insurance carriers, closure of even more small businesses, further job losses, and rationing of health care services. Similar plans in Kentucky and Oregon had been abandoned.

The reward clearly did not justify the risk

Politics of Dirigo Health

A Joint Select Committee on Health Care Reform, with four senators and 11 representatives from both major parties, was appointed to tackle the state’s health care issues. Members represented the Joint Standing Committees on Appropriations, on Insurance, and on Health and Human Services.

Between May 5 and June 13, many were engaged in discussing L.D. 1611, the Dirigo Health proposal. But some stakeholders felt they had been left out of the process and feared the outcome was a done deal from the beginning. Legislators received a great many calls from fearful teachers and other state employees worried about premium increases. Maine’s employer community turned hot, then cold, on the bill. Often, local chambers of commerce took a position on the bill opposite the position taken by the state chamber. The whole process felt too rushed.

Nevertheless, Dirigo Health was passed by the legislature and signed by the governor on June 18. A great many questions remain about the plan’s ability to perform as hoped without throwing Maine’s health insurance and health care systems into chaos. Will Congress allow the Medicaid “match” for employer payments? Can providers keep cost increases within goals? How many employers will voluntarily sign on? Can hospitals realize a “savings” of $275 million in bad debt and charity care?

Will providers accept reimbursement at reduced rates? Will Anthem Blue Cross and Blue Shield remain in the state? Will insurance premiums go up by 4 percent? Can Dirigo Health achieve its goals with an acceptable expense ratio? Will the finest health care in the world now be rationed to reduce costs?

Why I Voted Yes

Since being elected in 2000, I’ve tried my best to follow a game plan on issues: to understand the implications of a bill; to listen attentively to all input and debate; to avoid playing politics; and to vote my conscience. When I vote on legislation, I consider my Bangor constituents first; second, the priorities of the Committee of Oversight (Natural Resources); third, the citizens of Maine; and fourth, the Republican Senate caucus.

This bill was complicated. We were being rushed and had proposed we take a final vote on February 1, after all stakeholders had reviewed the final language. The ink was barely dry on the latest challenges. Governor Baldacci was in a pucker to have a vote taken ASAP … and a vote we would take–four months later.

So, how did I come to vote “yes” in the morning hours of Saturday, June 14? The legislature had been discussing L.D. 1611 since May 5. A great many changes had been made to the original 72-page plan. As a past board member of Maine Blue Cross and Blue Shield and MEMIC insurance companies, I feared L.D. 1611 would do more harm than good. The cure would prove worse than the disease.

Lee Tooman, vice president of government relations for Golden Rule Insurance Company, told Health Care News, “Say what you want about last year’s effort in Oregon to pass universal health care–at least you knew what you were voting for. By contrast, Maine’s bill represents an awesome delegation of discretionary authority to unelected agency bureaucrats. The bill empowers the government in an unprecedented way to manipulate both the health care delivery and health care financing systems in the state.”

During Friday, I sought the input of three key people. They best understood the implications of L.D. 1611; they knew their business; and their opinions could be trusted. In the end, I talked with Senator Karl Turner, ranking Republican senator on the Appropriations Committee; Representative Kevin Glynn, ranking minority member of the Insurance and Financial Affairs Committee; and the lobbyist for Eastern Maine Medical Center, my district’s largest employer and a fully engaged party in the Dirigo Health negotiations.

All three advised me to vote yes when L.D. 1611 came to a vote. I had done my best to understand the bill, to remain abreast of its changes, and follow due process.

From the very beginning, Governor Baldacci had enough votes in the legislature to pass the proposal, given the Democratic Party’s control of both house and senate. To his credit, he has continually stated he wants to pass legislation on a bipartisan basis, and his willingness to compromise on Dirigo Health during those five weeks is a testament to his following through on a promise. I applaud him for that.

I also voted “yes” on the Republican amendment to L.D. 1611, which would have added a high-risk pool for certain insureds–a piece Governor Baldacci should have added to Dirigo Health. (It’s not enough to merely oppose legislation. It’s vitally important to proffer alternative strategies, and I am pleased we did.) Unfortunately, the amendment failed, and I believe it will come back another year as an important insurance issue.

Only time will tell if Dirigo Health will work or fail. We’ll not even begin seeing signs of success or failure until 2004, when Maine has spent the Bush-Collins $54 million tax rebate money and Dirigo must fend for itself.

W. Tom Sawyer Jr. is a Republican state senator from Bangor, Maine. This article was first published by the Bangor Daily News and is reprinted here with the senator’s permission.