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Sunday, October 30, 2005
Dirigo Health's savings decided
Copyright © 2005 Blethen Maine Newspapers Inc. | ||
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After months of uncertainty, supporters of DirigoChoice say the state-sponsored health insurance program will have enough money to operate into next year. As much as $43.7 million is available, thanks to a Saturday night ruling by state Superintendent of Insurance Alessandro Iuppa. The money represents how much the superintendent says has been saved in the health care system because of Gov. John Baldacci's Dirigo Health reform plan, which includes DirigoChoice. The money is to be collected from health insurance companies in Maine under the premise that savings from efforts such as voluntary spending caps by hospitals and limits on hospital expansion should have trickled down to insurers. An annual fee, known as a savings offset payment, is to be assessed starting in January and applied once a one-time allocation for DirigoChoice runs out in late spring. The money is significantly less than the nearly $137 million the Baldacci administration estimated that Dirigo Health, the most ambitious initiative of the governor's tenure, has saved over the last year. Still, the governor called the superintendent's decision a victory for Dirigo Health. "I think (Iuppa and the Bureau of Insurance) have demonstrated that there should be real confidence in the reform plan and that it's produced savings," Baldacci said Saturday night. Baldacci said insurance companies have no reason to pass the fee on to consumers, as they had warned they would do during the run-up to Iuppa's decision. Insurers - backed by a business community worried about shouldering a talked-about 4 percent rate increase - vigorously protested how savings have been measured by the Baldacci administration during two days of public hearings last week. Their consultants found errors in calculations and indicated data was manipulated to make Dirigo Health appear more broad-reaching than it was. It was not known how the group received Iuppa's ruling or whether any appeals to state Superior Court were planned in the allotted 30 days after the ruling. None of the representatives for intervenors in the hearing - Anthem Blue Cross Blue Shield of Maine, the Maine State Chamber of Commerce, the Maine Association of Health Plans and the Maine Automobile Dealers Association Insurance Trust and the Bankers Health Trust - returned phone calls Saturday night. In anticipation of Iuppa's ruling, the health plan association issued a statement Friday. "We continue to believe that the finding of savings in the system without demonstrable and quantifiable evidence . . . will result in increased premiums and less affordable coverage for Maine's employers and employees," the association said. The actual amount for the fee will be established by the board of directors of the Dirigo Health agency, which operates DirigoChoice. The fee cannot surpass 4 percent of paid claims, a limit the board may not be allowed to reach. In 2004, 4 percent of paid claims represented roughly $50 million. Dr. Robert McAfee, board chairman, said that the board may end up assessing nearly the maximum allowed. "I suspect that we'll come quite close to the full amount in order to insure as many people as we can," said McAfee, who will meet with the rest of the board on Nov. 10. "I anticipate the need (for the program) will be greater, not less." So far, 8,500 people are enrolled in DirigoChoice. The fee money will be used to provide discounts to income-eligible enrollees. It also will be used to fund the Maine Quality Forum, the state's watchdog group on health quality. Iuppa and his department had two days from the end of hearings Thursday to arrive at the $43.7 million figure. Working off the $136.8 million estimate submitted by the Dirigo Health board, Iuppa knocked off roughly $27 million in calculation errors. The remaining difference he attributed to "assumptions they made that we did not find reasonably supported by the evidence." Iuppa said in some cases Dirigo Health consultants overlooked data that would have decreased savings or took credit for savings that would not be accrued until later years.
Staff Writer Josie Huang can be contacted at 791-6364 or at:
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