Baldacci: Insurers can't transfer cost of new Dirigo fee

Friday, November 4, 2005

Associated Press

AUGUSTA — Gov. John Baldacci said Thursday that it would be "unacceptable" for some health insurance companies to raise their premiums because of a new state fee they must pay for the Dirigo program. The governor also said insurers, who had agreed not to pass new fees on to consumers in the form of higher premiums, should "keep their word" or face any of a number of options, including legislation to prevent the premium increases.

"The country is watching what's happening in Maine as a laboratory" on universal health care, Baldacci said at a news conference in the State House Cabinet Room, which was nearly filled with Dirigo supporters.

So far, more than 8,000 people and 2,000 small businesses have enrolled in the DirigoChoice program, he said.

The two-year-old program, Baldacci's No. 1 priority since he took office, is designed to provide universal access to health coverage for uninsured and underinsured Mainers. Part of its funding comes from savings resulting from voluntary spending caps by hospitals and other cost-control efforts.

Last weekend, state insurance regulators ruled that those savings amounted to nearly $44 million in Dirigo's first year.

Insurers are supposed to turn those savings over to the state in the form of fees, state officials say. As part of an agreement reached while the Dirigo law was being deliberated, insurers said they would not pass the fees on to consumers, said Sen. Art Mayo, D-Bath, who was involved in the legislation.

"This is unacceptable. Period," Baldacci said.

Mayo said passing the fees to premium payers would also be unacceptable to a majority in the Legislature, in which Democrats have a thin edge.

Senate Majority Leader Michael Brennan, D-Portland, said the so-called savings-offset payments resulting from savings were the most heavily debated aspect of the Dirigo bill when it was debated.

Brennan, who co-chaired the committee that took up the bill, said it's "extremely unfair" for insurers to profit from savings created by Dirigo.

Baldacci also said he's looking at options including a bill to prevent the rate increases. He said the Dirigo board will take up the matter when it meets on Nov. 10.

After the $44 million offset figure was announced, some insurers said that they hadn't seen any savings and that the costs will be passed to consumers in the form of higher premiums.

Asked to respond to Baldacci's remarks Thursday, Cigna Corp. spokeswoman Lindsay Shearer said, "We were not present at the press conference, so it would not be appropriate for us to comment."

Mark Ishkanian, spokesman for Anthem Blue Cross Blue Shield of Maine, said Anthem interprets the statute creating Dirigo to say insurers can pass the savings offsets to their members in the form of premiums.

He added that Anthem has already told its members that savings offsets will be a factor in their premiums.

"As the only insurer willing to step up to the plate and partner with the state on the DirigoChoice product, we were offended by the tone and content of the (governor's) statement," Ishkanian said.

"Maine is one of the most difficult markets for health insurance in this country. Suggesting that we are making excessive profits in Maine is plain wrong," he said.

A message left with Harvard Pilgrim Health Care was not immediately returned.

The governor's news conference came a day before the Maine Heritage Policy Center, a conservative research group and a staunch opponent of Dirigo, was to hold a conference in Portland focusing on alternatives to a program that has drawn attention from numerous states.

"Life After Dirigo Health: Real Solutions for Effective Health Reform in Maine," will include eight speakers.

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