All Maine Matters

January 2006



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Designed by Laisha

by Senator Paul Davis

In May of 2003, Governor Baldacci unveiled the Dirigo Health Plan. The Dirigo Plan promised to do the following:
Provide affordable access to health insurance for those who were uninsured.

In its first year, the Legislature provided the Dirigo Health Agency with one-time funds of $53 million from a federal relief package originally earmarked specifically to offset the budget challenges caused by Medicaid shortfalls.

By now, chances are pretty good that when you open the paper and see another headline about Governor Baldacci’s DirigoChoice Health Plan, you turn the page as fast as you can. I wish I could tell you that reaction was okay, but it isn’t.

The reality is that DirigoChoice, the Governor’s plan to overhaul Maine’s health care system, should be of concern to every Maine citizen, especially the majority of us who are already paying for our own health insurance.

People across the state are beginning to ask questions. The answers they’re getting are causing them to question the soundness of this boondoggle that is the bedrock of the Baldacci administration. My office has a constant stream of calls on this matter. Even those who have signed up for the program are growing increasingly suspicious of its benefits: Of the approximately 8,500 people originally enrolled in DirigoChoice, 1,200 of them dropped the coverage within ten months. That equals a customer-dissatisfaction rate of 14 percent.

A private insurance company with such a high rate of failure would be spending lots of money trying to find out what is wrong with their product. Instead, Governor Baldacci digs in his heels, spends large sums of money on advertising touting how great DirigoChoice is, and pretends the negative numbers don’t exist.

Those of us in Government owe the people of Maine an honest, objective look at the failures and successes of the program. Unfortunately, the negative numbers far outweigh the positive numbers with regard to DirigoChoice:

The next surprise to come from the Dirigo experiment arrived in the form of a newly proposed tax. Given our experience with the Baldacci administration and the Majority Party, I guess it should come as no surprise that there is a new tax proposal on the table. Some prefer to avoid the “tax” word and want to label it a “Savings Offset Payment”.

No matter what you call it, it will be money coming from the pockets of people already paying for their own health insurance. I say if it looks like a duck, quacks like a duck, and walks like a duck, it’s a duck.

Call it a tax, a fee, an assessment; just don’t call it “savings.” The alleged savings to the health care system of $43.7 million have resulted in a 4 percent tax on insurance premiums. Insurers say they have to pass this cost on to their customers. A goal of this program was lower health care for all of us.

Major Maine newspapers have been acting as cheerleaders for the Governor’s agenda, but even they are beginning to raise some objections. An editorial that appeared in the Blethen newspapers last month said “the (SOP) fees are not an ideal way to raise money for Dirigo Health.”

The editorial went on to say, “Documenting the program’s savings is impossible.” That might explain why the Dirigo staff initially reported $233 million in savings after one year. The Dirigo Board then adjusted the amount down to $136 million in savings.

The Bureau of Insurance then weighed in, claiming that the savings from Dirigo after one year amounted to only $43 million, 18.4 percent of the original estimate by the Dirigo staff. It is no wonder the private insures in the state received the news of a “Savings Offset Payment” with skepticism.

It should also be noted that about $40 million of the savings was due to the voluntary cutbacks in the form of postponed capital projects by Maine hospitals and had nothing to do with government action. Sounds like an endorsement for allowing more private enterprise and competition into our healthcare and health insurance system.

Some, led by the Governor himself, have charged that Republicans are “attacking” DirigoChoice, saying that we are simply trying to destroy the success of the Baldacci administration. That is untrue.

Even though I was not one of them, many Republicans voted for Dirigo. In addition, legislators from my party have offered numerous improvements and ideas only to have them rejected without the benefit of discussion by the majority party. An affordable solution to the health insurance situation in Maine would be to revise all the regulations that have been put in place over the years resulting in most insurance companies packing up and taking their business elsewhere.

To summarize what we have to show for the Dirigo Health Plan after 2 ½ years:

Just to show that the Republicans aren’t always “attacking” the Governor’s Plan, I’ll end by highlighting the positive effects of Dirigo. One thousand six hundred previously uninsured Mainer’s are covered.

Senator Davis lives with his wife in Sangerville and represents Senate District 27 and is also the Senate Minority Leader.

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