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Sunday, May 23, 2004
Dirigo Health faces key
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BRUNSWICK — Dirigo Health, the state's nationally recognized plan to cover all uninsured Mainers by 2009, approaches a critical crossroads Monday. Insurance companies must say whether they intend to bid on the program. If none does, or if the bids due in a few weeks don't pass muster, the state will ask the Legislature to create a nonprofit insurance agency as a last resort, said Gov. John Baldacci's top health policy adviser, Trish Riley. "It won't be as fast," Riley told 60 members of the Bath-Brunswick Region Chamber of Commerce at a Tuesday breakfast, "but we're going to make Dirigo happen one way or another." A year has passed since the governor tangled with hospitals and insurance companies and emerged with a law hailed around the country as the most ambitious state attempt at health-care reform. Now his administration faces another formidable task - making the law work. Efforts to rein in the costs of health care and improve its quality are under way, and a state health plan will be unveiled next month. But the centerpiece - a program that would cover Maine's 138,000 uninsured residents through insurance priced on ability to pay - is behind schedule. "There's definitely a lot of states interested in the outcome of Dirigo Health," said Karmen Hanson, a health policy specialist for the National Conference of State Legislatures. "But they know it hasn't necessarily kicked in and are wondering - 'Is it still going on?' " Launch date delay The July 1 launch date for the Dirigo Health insurance program has been postponed until later in the summer. The governor's Office of Health Policy and Finance took more time than expected to design products that could lure individuals and small businesses in an increasingly competitive small-group market. "Nobody ever has tried to create a totally innovative health plan, including us," Riley said, "so it's kind of like fitting a square peg into a round hole." The request for proposals did not go out until this month. A bidders' conference drew five insurers: Anthem Blue Cross and Blue Shield of Maine, Cigna, Aetna, Harvard Pilgrim Health Care and United Health Care. Bids are due June 11. At the end of last week, Anthem, the state's largest private insurer, had not decided whether to place a bid. "Management will be meeting Monday morning," said Anthem spokesman Bill Cohen, who said staff members were working through the weekend on this issue. Insurers are considering whether they can provide the product envisioned by the state and still make a profit. The financial soundness of such a venture will hinge on whether enough people sign up for an untested program. Judging from daily inquiries about Dirigo Health, the state should not have any problem in the first year enrolling 31,000 uninsured people and another 10,000 insured people who want to switch to the program, Riley said. But many Mainers say it's still too early to picture joining Dirigo Health, even though they are desperate for relief. Doreen Pendleton and her husband, who run an interior decorating business in Richmond, pay $350 a month for $2,500 deductible plans - what amounts to catastrophic care. She left Riley's talk wanting to learn more. "I think it sounds promising," said Pendleton, 56. "But with anything new, I think there's an awful lot of unanswered questions about how the program works and how many people will be willing to go into it." In the small-business community, where many employers cannot afford to offer health insurance, leaders' opinions are mixed over Dirigo Health's future. Deborah Cook, executive director of the 160-member Maine Small Business Alliance, is optimistic about the state's enrollment projections. "If the product that comes out matches what their intention is," Cook said, "I think they'll meet their goal." David Clough, state director of the National Federation of Independent Businesses, is not so sure. "For those who do not have health insurance, it's all about price," said Clough, who works with 6,000 members in Maine. "It would have to be considerably cheaper than what's already in the market, and it remains to be seen if Dirigo can make any kind of dent on that." As it stands, Dirigo Health would offer a $1,250-deductible plan to a single employee for $282 a month - $846 for an employee with a spouse and children. The numbers are subject to change after negotiations with an insurer. Preventive services Critics have called the proposed plans too costly, but Riley said that assessment ignores the comprehensive benefits and subsidies included. The program would offer discounts for people living under 300 percent of the federal poverty level - income of about $28,000 a year for a single adult and $56,500 for a family of four. In addition to traditional co-pay coverage of physician visits and prescription drugs, the plan would provide free preventive services - physicals, flu shots, mammograms - and offer discounts for gym memberships. If members meet health goals like quitting smoking and losing weight, they could receive a $100 cash award, Riley said. Another innovative feature: Dirigo Health would welcome Mainers enrolled in the state's Medicaid program, MaineCare, which is being expanded to include nearly 14,000 more adults this year. Dirigo Health could help individuals who float in and out of eligibility for MaineCare because of fluctuating monthly income. If MaineCare enrollees join Dirigo, they would pay nothing for MaineCare benefits and would also enjoy access to Dirigo's award program. If they get a pay raise, their health care would not be disrupted. They would pay just for health insurance, likely with the help of subsidies. MaineCare-eligible employees could also help employers meet a state requirement that at least 75 percent of eligible employees agree to participate in a health insurance program before an employer can offer it. "Because of the discounts and MaineCare, more low-income people will be able to take up their employer's coverage," said Adam Thompson, a legislative liaison for the Governor's Office of Health Policy and Finance. Blazing unique trail Conventional wisdom says covering the uninsured saves everybody money because those people can receive regular checkups and won't require the costly trip to the emergency room when crisis strikes. Then hospitals won't have to provide as much charity care for those who can't pay and won't have to recover those losses by raising rates for insurance companies. What drew national attention to Maine is its unique path to striving for universal health care. The state believes it can recapture tens of millions in bad debt by insuring people through Dirigo Health and the MaineCare expansion, then asking hospitals to pass those savings to insurance companies. The state, to help fund Dirigo Health, plans to charge insurers a fee to reflect any savings from these lower hospital rates. The fee has yet to be determined but the law precludes levying more than 4 percent of the insurer's revenue. The program would also be funded by employer and employee contributions - employers would cover 60 percent of an employee's share - and federal funds drawn down for every MaineCare enrollee who joins Dirigo Health. For every state dollar spent on MaineCare, Maine receives $2 from the federal government. The total cost of operating Dirigo Health should amount to $90 million, Riley said. For the first year, however, the program would be supported by $52 million in start-up funds made available through federal fiscal relief to Maine. With so much riding on Dirigo, Riley said the state needs to proceed deliberately while working as fast as possible to put out a product. "We sent a message loud and clear - as have Maine's uninsured and small businesses - that we wanted this yesterday," Riley said. "We're balancing the need and demand to have it yesterday with the importance of doing it right."
Staff Writer Josie Huang can be contacted at 791-6364 or at:
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