WASHINGTON — Like millions of Americans, Nick Rosolino was thrust into the insurance-shopping maze this fall after learning his family’s health coverage will terminate Dec. 31.
But it was a policy decision made by the state of Maine – not Obamacare, the controversial new federal health care law – that precipitated the cancellation notices sent to Rosolino and thousands of other Mainers enrolled in the state’s Dirigo Choice insurance program.
Jan. 1 marks the launch of health insurance under Obamacare but also the end of coverage under the Dirigo Health Agency, Maine’s ambitious 10-year attempt at health care reform. Republican Gov. Paul LePage, a vocal Dirigo critic, dismantled his predecessor’s handiwork by eliminating its funding.
To supporters, Dirigo insured more than 40,000 Mainers and helped blaze the trail for President Obama’s landmark health reform initiative, the Affordable Care Act. Critics, meanwhile, contend Obamacare repeats many of the design and policy flaws that handicapped Dirigo.
Signed into law in 2003 and launched two years later, Dirigo Health was a bold step toward universal health coverage at a time when policymakers on Capitol Hill and in state houses elsewhere struggled to take even small steps.
Ten years later as Dirigo winds down, the program’s primary architect, Trish Riley, prefers to see Dec. 31 as the date of Dirigo’s transition rather than its demise.
“I think it’s a reasonable transition and, in many ways, Dirigo was a pace-setter and blueprint to national reform,” said Riley, former director of Maine Gov. John Baldacci’s Office of Health Policy and Finance.
Most of the 7,400 or so Mainers still covered by Dirigo Choice in October will find plans either through Medicaid or the insurance marketplaces created under the Affordable Care Act. Groups that help Mainers select new health coverage say the beleaguered federal website, HealthCare.gov, has improved significantly in recent weeks.
Some Dirigo users will pay less under the Affordable Care Act, others more. All will have to make a decision by Dec. 23, however, if they want health insurance on New Year’s Day.
Rosolino, who runs The Mind Gift Shop in downtown Portland with his wife, was still trying to navigate the system as of last week. He was waiting to hear whether his family of three would qualify for MaineCare – the state’s Medicaid program – or for subsidies if they purchase through the individual health marketplace “exchanges” set up under Obamacare.
The conflicting information from HealthCare.gov “helpers” and delays have left him frustrated. Equally concerning is an estimate, crunched by a friend in the insurance industry, that his monthly premium may rise from $450 to nearly $700.
“I can understand the technical glitches” with the website, Rosolino said. “The real issue is the cost. The cost is going to be a lot higher for folks in smaller states, especially Maine.”
Sandra Neily, a self-employed Greenville resident and Dirigo user, has had more success finding a new individual plan. Neily said she successfully used HealthCare.gov to select a plan that, after subsidies, will cost her less per month with a lower deductible and out-of-pocket costs.
Neily said she was angered by a letter she received in October from Dirigo’s insurance provider, Harvard Pilgrim HealthCare, that she said tried to sell her a more costly plan without adequately informing her of alternatives under Obamacare.
But she praised Dirigo Health Agency staff who sent two letters notifying her that Dirigo coverage would cease on Dec. 31 and then followed up with a personal phone call last month offering transition assistance.
“Dirigo staff was very helpful,” Neily said. “(They) let me know in plenty of time that the program would end.”
SMALL-SCALE TEST RUN
In many ways, Dirigo Health was a small-scale test run for the Affordable Care Act. And so far they are following similar tracks.
Both reforms sought to rectify the same health care woes by: reducing the ranks of the uninsured or underinsured; encouraging preventive care; expanding coverage for maternity care and mental health; controlling ballooning medical costs; preventing coverage denials for pre-existing conditions; and luring healthy young people into the insurance pool.
But Dirigo was also experimental and eventually became a political lightning rod, much like Obamacare is today. And even Dirigo’s most ardent supporters – then and now – acknowledge that the program cost too much and insured too few when compared to its lofty vision.
“I supported it but felt disappointed and had to acknowledge that it was more expensive than we wanted it to be,” said Sen. Margaret Craven, D-Lewiston, who co-chairs the Legislature’s Health and Human Services Committee.
Nonetheless, Craven believes Dirigo was a success for the population it served.
“Dirigo Choice covered middle-class, working people and small-business people who were priced out of the market,” Craven said. “Those were the people that it helped.”
In 2003, proponents predicted the program would insure up to 130,000 Mainers, more than 30,000 of whom would sign up by the end of the first year. The actual number over Dirigo’s life span is closer to 40,000.
So with Dirigo now quietly winding down and Obamacare clumsily gearing up, are there lessons that Dirigo can teach those promoting the Affordable Care Act? Or is Obamacare destined for the same potholes – or sinkholes – that have dogged Dirigo for the past decade?
Not surprisingly, answers to those questions tend to fall in line with the respondent’s views on the two laws.
“It was just so incredibly expensive for such a limited effect,” Joel Allumbaugh, health policy director for the conservative Maine Heritage Policy Center, said of Dirigo.
The Affordable Care Act, Allumbaugh continued, is another example of trying to solve complex health care problems with massively expensive government-run programs. “And I think (Dirigo) is a precursor to what we are seeing with Obamacare,” said Allumbaugh, an insurance broker who says he deals daily with business owners struggling to navigate the new law.
Riley said the program saved many lives by helping thousands of uninsured gain access to medical care and enabling more than 1,000 small businesses to provide insurance for their owners and employees.
Unfortunately, Riley said, opponents undermined the program’s funding strategy from the beginning and then criticized the low enrollment. Attempts to reform Dirigo and restructure its finances were then further undermined by politicization drawn largely along stark ideological differences about government’s role in health care, she said.
“It did a lot of good for a lot of people,” Riley said. “It certainly showed how difficult these reforms are to do.”
CHALLENGING TRANSITION FOR SOME
Now a lecturer and health policy fellow at the University of Southern Maine and George Washington University, Riley is herself a Dirigo policyholder. She recently enrolled through HealthCare.gov – albeit after a few failed attempts – and said her monthly premium dropped about $70.
The transition has been more challenging for some businesses and nonprofits, such as the Maine Organic Farmers & Gardeners Association.
MOFGA had a group plan through Dirigo that paid for employees’ coverage with an optional buy-in for additional family members.
Now, MOFGA is analyzing whether it makes more financial sense to purchase another small group plan – likely with slightly higher per-person premiums – or to direct employees to the individual market. If the latter, the nonprofit hopes to help cover employees’ monthly premiums. But how that would work under the new system was unclear, said MOFGA treasurer David Shipman.
“We are still in the thick of figuring out what to do,” Shipman said last week.
BOARD MAY CONSIDER EXTENSION
HealthCare.gov’s technical “glitches” were so severe that the board of trustees overseeing Dirigo has considered extending the program an additional month to ensure policyholders do not lose coverage on Jan. 1.
Board chairman Joseph Bruno said that appears unnecessary now based on the Obama administration’s latest assessments and anecdotal reports from Dirigo policyholders who have successfully enrolled. But the board will discuss the issue this week.
“Logistically, it would have been very tough to do, but we would have done it if we had to,” Bruno said.
Bruno was a Republican lawmaker from Raymond when Dirigo passed the Legislature with his support in 2003. Looking back, the law as initially set up was “unsustainable,” Bruno said, because determinations on who qualified for state subsidies were based only on a person’s income, not income and assets.
That was later amended to prevent someone with low income but a $1 million house from qualifying for state assistance.
After serving several years on the Dirigo Health Agency board of trustees, Bruno at times sounded nostalgic as he talked about the insurance program’s pending termination.
“It was a good benefit package at a good price,” he said. “There were enough changes made to the program that it could have sustained itself for many, many years.”
Kevin Miller can be contacted at 317-6256 or at:
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