AUGUSTA, Maine — The administrators of the controversial Dirigo Health program told lawmakers on Thursday that the number of private companies signing up for insurance has increased significantly since last fall despite talk about the program’s likely demise.
Additionally, Dirigo representatives said the program will continue to provide insurance coverage through 2013 despite Gov. Paul LePage’s proposal to phase out the primary source of funding.
About 140 small businesses and roughly 2,000 new individuals have enrolled in the DirigoChoice program since enrollment reopened last fall. A public-private partnership with Harvard Pilgrim Health Care, DirigoChoice offers subsidized health coverage to eligible individuals as well as insurance plans to small businesses.
“In light of all of the news out there about the future of this program, we still have seen significant interest from employers throughout the state as well as from individuals and sole proprietors,” said Karynlee Harrington, executive director of the Dirigo Health Agency.
Launched in 2003 as a way to increase access to health care while lowering costs, Dirigo has become a political lightning rod in recent years. LePage and Republican lawmakers now controlling both chambers of the Legislature have made clear their intent to dismantle Dirigo, despite the fact that no General Fund money goes into the program.
An estimated 15,600 individuals and 630 businesses are projected to be enrolled in Dirigo by the time the current fiscal year draws to a close on June 30.
LePage’s spending blueprint for the two-year budget cycle that begins July 1 would begin the process of shutting down Dirigo by phasing out the fees or assessments charged to insurance companies on all paid claims. Those assessments, which critics contend are merely passed along to policy holders, currently constitute more than 90 percent of Dirigo’s $47.9 million budget.
The remaining 9 percent comes from the Fund for a Healthy Maine. But LePage has also proposed eliminating that funding for Dirigo.
It is too early to tell what Dirigo’s financial situation will look like because lawmakers are just beginning to delve into LePage’s budget, and they could make considerable changes to the administration’s spending proposals. Under LePage’s plan, Dirigo would cease to operate as of Dec. 31, 2013, Harrington said.
Dirigo’s Board of Trustees is scheduled to meet on April 4 to discuss how to proceed in the face of reduced funding.
“The board will consider a number of options, including capping the program and/or reducing benefits and subsidy levels,” she said.
Several lawmakers on the budget-writing Appropriations and Financial Affairs Committee expressed concern about what will happen to the more than 630 small businesses and thousands of individuals currently participating in Dirigo.
Joseph Bruno, chairman of the board of trustees, assured lawmakers that people will not be tossed out of the program, although it is impossible to say what the modified health plans will look like.
“It may not be as rich of a package, but it is going to be a product that people can afford,” Bruno said.
Dirigo’s hypothetical last day of Dec. 31, 2013, coincides with the beginning of the new state-run health insurance exchanges required under President Obama’s one-year-old health care reform law.
The exchanges are intended to provide a competitive “insurance marketplace” where small businesses or individuals can come together to obtain lower-cost insurance, similar to the way larger companies can negotiate lower rates or premiums.
Both Harrington and Bruno said that, beginning in 2014, Dirigo could be transformed into the state health exchange, albeit under a different and less politically charged name. Current Dirigo participants could then obtain health coverage through the exchanges.
The technology, the staff and the know-how are already in place at Dirigo because of the similar mission of the agency and the exchanges, the pair said.
“We have the foundation to become the health insurance exchange,” Bruno told lawmakers. “It is up to the governor to decide what he wants.”
Rep. David Webster, D-Freeport, pointed out that Maine Attorney General Bill Schneider — with LePage’s strong backing — joined a multistate lawsuit challenging the constitutionality of the federal health care law.
Webster then asked what would happen to current Dirigo participants when the program expires in 2014 if the multistate lawsuit succeeds in dismantling the health exchanges required under Obama’s health care law as well?
“I think you have to cross that bridge when you get to it,” Bruno said.