All Maine Matters

April 2006



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Dirigo Health Plan: Baloney Season is in Full Bloom
by Scott K Fish

Baloney season is in full bloom. Example: mixed messages we’re getting (and will keep getting until Election Day 2006) about Governor Baldacci’s Dirigo Health Plan (DHP). Dirigo is the Governor’s two-part state-run health insurance combining Medicaid and a subsidized health plan for individuals, sole proprietors, and small businesses called DirigoChoice.

Recently, the Maine State Employees Union (MSEU) funded radio ads glorifying DHP and Governor Baldacci for, they claim, saving Maine millions of dollars while insuring thousands of uninsured and under-insured Mainers.

Meanwhile, an email lands in my inbox. The Hon. Tarren Bragdon is writing about Dirigo for The Heartland Institute. Bragdon says Dirigo, “is hemorrhaging money and faltering, according to figures Baldacci’s administration.”
Who to believe?

Tarren Bragdon, a former Maine legislator, represented part of Bangor in the State House. Today, Bragdon is a policy analyst for the Maine Heritage Policy Center, an expert on Dirigo. He leads the MHPC's "DirigoWatch," a project dedicated to keeping Dirigo from escaping into the Land of Make Believe.
When Baldacci launched Dirigo, that would have been a great time for the MSEU to join. Instead, the MSEU said, No thanks, we’ll keep our gold-plated health insurance program. As a former state employee I promise you—state employees have excellent health care insurance.

But why was the MSEU-funded radio raving about a program of which they want no part? Do as we say, not as we do.
I’ll stick with Tarren Bragdon’s Dirigo information. Numbers don’t lie.

Governor Baldacci (June 2003) told Dirigo would provide health insurance to 135,000 Maine uninsured/under-insured residents within five years, with no new taxes, while lowering health insurance costs for all Maine.

Not true.

Tarren Bragdon: “Since January 1, 2005, 8,500 people have enrolled in DirigoChoice. But...[o]ne in seven people (14 percent)...dropped the plan after...less than 10 months.”
Bragdon cites an 8/05 Muskie School study showing that only 22.4% of DirigoChoice policyholders had no health insurance when they signed on. That suggests:

That means, writes Bragdon, “the estimated annual cost to Maine taxpayers for each uninsured person covered by DirigoChoice is over $15,900.”

Governor Baldacci used $54 million meant for tax relief to start Dirigo. Now he’s taxing all health insurance claims paid in Maine ($44 million) to keep Dirigo afloat.

What’s better? Competition! Freedom over socialism. My $370 monthly Maine policy costs $150 per month in Texas. Why?

Because of two pieces of 1993 legislative insanity called “community rating” and “guaranteed issue.”
In 1993, Maine began forcing Maine insurers to take ANYONE, even gravely ill people, as new insurees (guaranteed issue) and stopped allowing age to be factored into insurance rates (community rating). Who wants that risk pool?

We need to fix these sick policies so private insurers will want to come back to Maine. I even have a name picked out for this new insurance plan: FreeMarketChoice.

Scott K Fish has been active in Maine politics since 1989. He is founder/owner of the As Maine Goes web site, writes a monthly political column for Bangor Metro magazine, and is a consultant for the Maine Heritage Policy Center.

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