Lawmakers take new look at health plan

Posted April 14, 2009, at 10:06 p.m.

AUGUSTA, Maine — Legislative champions of Maine’s flagging health care program stepped forward Tuesday to defend the system as lawmakers consider how to improve it.

Dirigo Health, established as a step toward universal health care coverage six years ago, relies in part on subsidies to expand access to health care.

In testimony before the Legislature’s Insurance and Financial Services Committee, ranking lawmakers tempered their claims about the system’s potential and conceded its limited accomplishments.

Rep. Sharon Treat, D-Hallowell, said Dirigo Health “isn’t the be-all and end-all in health insurance reform.”

In prepared remarks, Treat said the program “may well prove to be a bridge program as we move to a more comprehensive state or federal health care system.” But it remains an important option for many Mainers right now, she said.

Dirigo Health supporters estimate the program has covered more than 29,000 people since it began but they acknowledge that enrollment has dropped below 10,000. Most enrollment has been on hold for two years because of financing problems.

Two similar bills — both sponsored by Treat, including one on behalf of Gov. John Baldacci — would eliminate a controversial savings offset payment, or SOP, that is determined annually and used to fund Dirigo. The bills would replace the SOP assessment on insurers with a fixed levy on paid claims.

Proponents argue that a new financing scheme would stabilize the stream of revenue for the program and reduce administrative costs associated with rate-setting proceedings.

But opposition among the business community, led by the Maine State Chamber of Commerce, remains widespread.

Cigna Healthcare lobbyist Joe Mackey told the committee the program basically amounts to a tax on employers and employees who find it hard to purchase their own insurance.

“Again, these are the wrong people to tax,” Mackey said in a written presentation.

The Chamber of Commerce concurred in a recent newsletter, saying that “adding an assessment on to health insurance costs … only makes health insurance that much more expensive and puts it farther out of reach for people struggling in an economic environment unlike that seen since the Great Depression.”

Democratic Senate President Elizabeth Mitchell of Vassalboro spoke in support of the Baldacci bill, which could open the way for a program redesign while offering an indirect nod to critics of the program.

“Dirigo is needed,” she said. “You have a chance to turn this ship around.”

Last fall, Maine voters overwhelmingly rejected a tax package including new levies on beer, wine and soda to finance Dirigo Health.

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