In 2014, when the federal health reform law takes full effect, federal subsidies will replace much of what Dirigo does now, but until then, as we transition to a new governor and Legislature, I am repeatedly asked what will happen to Dirigo now. That is a question for our new leaders to address.
The Dirigo Health Agency is an independent state agency, run by a bipartisan board of trustees who serve specific terms. The new Legislature will convene in January and it takes legislative action, including public hearings, to change Dirigo’s functions.
I am pleased to report that we have addressed many concerns of Dirigo’s critics. Those include the need to reduce costs in the program; focus on the uninsured; impose an asset test; create vouchers for other insurance products and start a high-risk pool. It’s a work in progress and significant changes are now in place. Today, the program is open, can cover more Mainers, and is adding new small businesses to the 562 now enrolled statewide.
Here are the facts:
No General Fund dollars support Dirigo, so eliminating it won’t help the state budget.
Dirigo Health Agency pools individuals and small businesses and successfully bargains rates on their behalf.
Four programs at the Dirigo Health Agency are now open for enrollment by Mainers who are uninsured or underinsured and have incomes below 300 percent of the federal poverty level ($32,490 for an individual; $66,150 for a family of four). Health Care Tax Credits are available for workers displaced by foreign trade. A high-risk pool is available for those uninsured with pre-existing conditions. Part-time, uninsured workers can get vouchers to help afford coverage from any insurance company in Maine if they work for a business that offers it. Coverage is available for individuals, self-employed and small business, including subsidies for those eligible (www.dirigohealth.maine.gov).
DirigoChoice, offered by the nonprofit Harvard Pilgrim Health Care, will see no increase in the base premium for individuals and the self-employed, and only a 2 percent rise in small business premiums — far better than the double-digit increases in the rest of the market. That’s why small business and individuals are joining.
In 2009, Legislation fixed the funding, which is now predictable and allows new enrollment. To be sure, Dirigo does not cover all the people we hoped to, but that’s because the program never got the funding to support those aspirations.
The legislative compromise reached to pass reform in 2003 reduced funding and eliminated many of the cost containment efforts included in the original proposals. In addition, federal Medicaid funds were not forthcoming. Fewer dollars meant we could serve fewer people.
Yet, more than 32,000 Mainers have benefited from the program at some time, and that number will grow this year. They are our neighbors and the small businesses we frequent each day.
Dirigo Health Reform is a much broader initiative than the insurance program. It addresses costs, quality and access. New insurance rate regulation and transparency, voluntary hospital cost targets, limits on new hospital construction, and the Maine Quality Forum are in place.
We have invested in public health and prevention, building a new streamlined and consolidated public health system, launching a free health risk assessment called KeepMeWell, and restructuring how we pay for health care to support better primary care and prevention. All this work has been done collaboratively with the public and private sectors and it is paying off.
In 2003, Maine was the 16th healthiest state; by 2009, we ranked ninth. Maine ranked 19th in covering the uninsured in 2003; by 2009, we were sixth, according to America’s Health Rankings.
Despite costs that are still too high, Maine has begun to reduce the trend of rising health care costs. From 1999 to 2003, average family premiums for workers in Maine grew an alarming 51 percent, compared with 38 percent nationally.
Comparatively, from 2003, when Dirigo reforms began, to 2008, premium costs grew at 9 percent in Maine versus 14 percent nationally. During that same time, the average annual deductible actually went down while the rest of the nation’s grew at double digits. It’s hard to believe, given the cost crisis we face, but Maine has begun to buck the national trends rather than lead the cost growth.
When Gov. John Baldacci, and those of us appointed by him, depart in January, we leave a solid foundation from which our state can implement national health reform and complete the promise of affordable coverage for all. Much of what is required nationally is already in place here.
Trish Riley is director of the Governor’s Office of Health Policy and Finance.