State panel readies for health law

Posted April 23, 2010, at 8:39 p.m.

AUGUSTA, Maine — Gov. John Baldacci and the Legislature are preparing to lay the groundwork for the incoming administration of the new federal health reform law and are getting set to implement the sweeping reforms over the next three years.

“There will be an enormous impact,” Baldacci said in an interview Friday. “In this first year alone, we will see help for the elderly for prescription drugs, students being able to stay on their family policy, coverage of pre-existing conditions and tax credits for business.”

He said the Health Reform Implementation Steering Committee he created by executive order will draw on agencies across government to prepare the changes in policy and law necessary for the reforms to be implemented.

“We will have all of the information put together and recommendations for the next governor and Legislature to consider,” Baldacci said.

In addition to the governor’s steering committee, the Legislature created a Select Committee on Health Reform Implementation. Committee members are expected to be named next week. Rep. Anne Perry, D-Calais, the co-chairwoman of the Legislature’s Health and Human Services Committee, said she will not be on that panel because she cannot seek re-election in the fall due to the term limit law.

“I understand the members will be legislators that may be back next year so we have some continuity in planning,” she said. She will be involved in the implementation process, however, because she also serves on the Advisory Council on Health Systems Development.

“There is a lot of information here, and it is very complicated,” Perry said. “We need to make all of this understandable as we go forward with implementation.”

Trish Riley, the governor’s chief health policy adviser, told the advisory council on Friday that Maine is in better shape than many states to implement the new law. She said Maine already has adopted many of the reforms, such as those regarding transparency in insurance policy pricing and expansion of Medicaid to cover more families.

“Maine is in a very strong place, despite all the controversy we have been engaged in for the last seven years or so,” she said, referring to the Dirigo Health insurance program. “We have a very, very solid foundation to flip the switch for national reform.”

Riley acknowledged the “mistakes” made in implementing the Dirigo program have helped the state prepare for new national reforms. She said the process to craft recommendations for the next governor and Legislature will be open and will include all the various stakeholder groups.

“We want to talk everything through and look at all the consequences,” she said.

State consultant Robert Seifert from the Center for Health Policy & Finance at the University of Massachusetts Medical School agreed with Riley. He said Maine already has expanded coverage under Medicaid, called MaineCare by the state, and will get additional federal subsidy as a result.

“This state, and other states that have acted early to expand coverage, will receive enhanced match rates,” he said.

The amounts of money are significant. Maine currently has a match rate of 63 percent, which means for every dollar spent by the Medicaid program in Maine, 63 cents comes from the federal government. Under the new law, that rate goes to 90 percent.

But, he said, not all provisions of the new law will mean more money for the state. While Maine has realized millions of dollars from drug rebates from drug makers under the Medicaid program, the new law requires larger rebates and takes that revenue for the federal government.

“That is a possible budget gap issue for the state,” Seifert said.

How all of those changes in revenue will affect the state budget will depend in part on rules for implementing the reforms being written at the federal level. One of the jobs of the steering committee and the legislative panel will be to analyze those rules and their fiscal impact.

“We have to look at and review everything and see how it all fits together,” Riley said.

She said that includes research on how every provision will work in Maine. For example, she said, some research has been done on how the employer mandate to provide health coverage would work in Maine. The Department of Labor found that few businesses in Maine will be affected.

Out of the 46,000 companies in Maine, 44,000 have fewer than 50 employees, making them exempt from the mandate. She said when you subtract the number of companies with more than 50 employees that already offer health insurance, there are only 70 that could face sanctions if they do not offer coverage.

“And there are several incentives in the law to help them provide coverage,” Riley said.

She said some companies can get help this year with purchasing health insurance for their workers. The new law has tax credits available to companies with fewer than 25 employees, and the current 35 percent tax credit will increase to 50 percent in 2013.

Baldacci said the steering committee will meet as needed over the summer and fall so its package of proposals and options will be ready when the new Legislature takes office in December.

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