Anthem declares interest in Dirigo

By JOSIE HUANG, Portland Press Herald Writer

Copyright © 2004 Blethen Maine Newspapers Inc.

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Just one of Maine's major health insurance companies is interested in handling the state's Dirigo Health program.

Anthem Blue Cross Blue Shield of Maine, the state's largest insurer, said it may bid on the program, which aims to cover thousands of uninsured Mainers through affordable plans for individuals and small businesses.

Aetna, Cigna, Harvard Pilgrim and United Health Care attended a bidder's conference with Anthem this month, but none submitted letters of intent by the Monday deadline and can no longer place bids.

Some companies said they could not meet the state's expectations. Others said Dirigo Health did not fit in with long-term strategic plans.

"Dirigo has been the name of the game in town," said Wendy Morphew, spokeswoman for Aetna, which covers 86,000 people in Maine. But she said the company plans to concentrate on its strategy of "designing products and health plan options tailored directly to small business."

Other companies with little or no stake in Maine also may have submitted letters of intent. Thomas Dunne, executive director of the Dirigo Health agency, has said that bidders beyond the five identified at the conference could be interested.

But to protect the bidding process, Dunne said no information will be made public on other interested parties until bids are opened June 11.

"For the moment," Dunne said, "we just want to let the market do what the market does."

If no bids are satisfactory, the state will approach the Legislature about creating a nonprofit insurance agency as a last resort.

But if an insurer is chosen, a new private-public enterprise would be born. The company would provide the benefit, while the state would work on pricing the plans according to ability to pay. Discounts would be offered to 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.

At Anthem, officials offered little comment Tuesday.

"You have to be very careful that you don't prejudice or provide information (to other companies)," spokesman Bill Cohen said.

Observers were not surprised that Anthem is the only major player to emerge so far. The company covers about 500,000 people in Maine and owns roughly half of the health insurance market in the state.

"They have said that they want to be in the Maine market for the long haul," said Christopher St. John, executive director of the Maine Center for Economic Policy. "Therefore, they have a real stake in helping the state make this product work and to enhance their position as the dominant carrier in the market."

With the state's most extensive network of hospitals and doctors, Anthem may have the bargaining clout to extract good rates for Dirigo Health.

At United Health Care, on the other hand, "We don't have the network that we need to offer (Dirigo Health) at an affordable price," said spokeswoman Debora Spano.

Competitive bidding is considered the ideal, but an attractive product could still emerge even if Anthem turns out to be the only bidder, St. John said.

"This product still has to compete in the marketplace, and it still has to be attractive to business too," St. John said.

The state hopes to offer a $1,250 deductible plan to a single employee for $282 a month - $846 for an employee with a spouse and children.

The Dirigo Health insurance program is part of a larger reform law of the same name passed a year ago. The law also attempts to improve the quality of health care and contain its costs. St. John sits on the Commission to Study Maine Hospitals, a group created by the law to examine hospital costs and services.

Staff Writer Josie Huang can be contacted at 791-6364 or at:

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