Maine Launches Controversial Health Plan

Published August 1, 2003

Maine’s first-year Democratic Governor, John Baldacci, signed on June 18 a bill giving him something he asked for in early May: universal health care.

Trish Riley, director of the Governor’s Office of Health Policy and Finance, explained to media representatives, “We propose the creation of Dirigo Health, an independent not-for-profit organization run by a five-person Board of Directors. It will contract with insurance carriers to provide a comprehensive benefit offered, at first, to individuals, self-employed persons, and small businesses with fewer than 50 employees.”

In describing the administration’s plan for financing the program, Riley said, “Subsidies will be provided on a sliding scale to those with incomes below 300 percent of the federal poverty level (FPL) or $55,000 for a family of four. We ask employers to cover 60 percent of the cost of coverage and to cover part-time workers who work more than 15 hours on a pro-rated basis. I hope we can find our way to make good on the promise of our state’s motto for which this plan is named: Dirigo–Maine leads.”

Dirigo Details

The bill is intended to provide an estimated 180,000 uninsured people with access to medical insurance in a sweeping health insurance plan mirroring failed attempts in Kentucky, Tennessee, and Washington. The vote to pass in the House was 105-38, and the Senate approved the measure 25-8, allowing the state to start organizing the program within 90 days.

The plan creates a new bureaucracy to secure private health insurance for middle- and low-income residents. According to the plan’s advocates, all Maine residents who cannot afford health insurance would have access to low-cost coverage by 2009. The plan is expected to go into effect next year even though Baldacci admitted publicly the bill is flawed. He has asked legislators to pass it and fix it later.

Participants would be charged subsidized premiums according to their ability to pay and the amount of coverage purchased. Funding would come from a patchwork of sources, including a tax on insurance companies and the estimated $80 million the state expects to save each year by eliminating unreimbursed medical expenses incurred by uninsured residents.

“An Illusion,” Experts Warn

State politicians and health care experts alike say the program is doomed to failure. “This bill is an illusion and a promise not fulfilled,” Assistant House Minority Leader David Bowles (R) said before the final vote.

In a forum at the Greater York Region Chamber of Commerce, York Hospital President Jud Knox called the concept laudable but added it will not work.

“If I put a plan like this before the York Hospital Board, I’d get nowhere,” Knox said. “Is this plan going to cost small business more? I don’t know if it will for coverage, but I am convinced it will cost more somehow, through tax dollars or some other way. The bill is fraught with unknowns.”

What happens in years two and three no one, including the Baldacci administration, seems to know. The bill’s language says it will depend on a reduction in bad debt and charity care, but contains no mechanism for collecting or reallocating such funds. No plan has been outlined for long-term sustainability.

Arthur Levin, director of the New York-based Center for Medical Consumers, says calling the program “voluntary,” in that businesses can choose to opt in or out, is misleading. “Small businesses are going to get pressure from their employees to do this if they don’t have insurance now. This plan calls for small businesses to pick up 60 percent for employees who work over 20 hours, and for their families,” said Levin, adding, “As you know, this state is full of small businesses.”

Levin also noted, “This was a flawed plan from the get-go. The governor has been convinced risk pools do not work, but they are working in 31 states who have cut insurance costs by 41 percent or more. There’s a school of thought up here that people on charity care will all of a sudden step up and start paying for insurance. Even if it was made less expensive, we’d still be more expensive than any state around.”

“Maine is moving very fast toward government-run single-payer health insurance,” warns Scott K. Fish, director of special projects for the Maine Public Policy Institute. “The revised Maine Rx program is part of that movement. Maine’s new Dirigo Health Plan is another part.”

Betsy Chapman, chairman of the Institute’s board of directors, asked in a May 20 article in the Kennebec Journal, “What is the rush? It took decades to get into the current quagmire. Governor Baldacci wants to pass the most sweeping changes to our health care system in history … and we have a month to do it?

“The governor’s health care proposal is an experiment,” she continued. “The governor can’t promise his plan will perform as advertised, because he can’t point to anywhere where it has worked.

“If his plan can’t stand the deserved careful study and consideration of those who will be directly affected by it, the plan must be flawed. It is time that the people of Maine demand that their governor and legislators practice ‘evidence-based’ public policy. Let’s have no political experiments with people’s lives.”

Conrad F. Meier is managing editor of Health Care News. His email address is [email protected].