Dirigo Health is Governor John Baldacci’s initiative to provide health insurance to the state’s uninsured – all 130,000 of them. The governor’s heart might have been in the right place in 2003, when he pushed through the enabling legislation. But good intentions are not enough. Even the program’s most diehard cheerleaders in Augusta are sounding more subdued as evidence mounts that Dirigo cannot continue without massive infusions of cash. The state no longer has that kind of money.

As of August, some 7,900 people had signed up for DirigoChoice, the insurance arm of the program, run by Anthem Blue Cross and Blue Shield. Of those, only 1,800 were previously uninsured. The projected first-year enrollment was 31,000, so that target will be missed badly. But worse still is that the state is spending $15.3 million of your tax dollars a year to cover 1,800 people, an average of $8,400 for each uninsured person who climbs aboard. That’s a direct subsidy paid for by us taxpayers!

The economics of Dirigo have turned disastrous. Roughly 42 percent of participants have incomes just above the cutoff for Medicaid eligibility. That entitles them to the highest discount (a.k.a. taxpayer subsidy) the program allows – 80 percent of their share of the premium. It was expected that 15 percent of enrollees would be eligible for Medicaid, a joint state-federal health program for the poor that actually “makes” money for the state. For every Medicaid dollar Maine spends, the feds match it with $1.84. The trouble is that only one percent of current DirigoChoice customers fall into that category. Far short of the rosy projections from the administration.

Small businesses, which were to be the work horse of the program, are paying full freight to subsidize poorer participants. And small business employees make up only 40 percent of those enrolled, half of what was anticipated. And that’s not likely to improve. Employers have found Dirigo coverage to be as expensive – or more expensive – than they were paying for their previous health insurance. Dirigo premiums run to more than $300 per person per month.

For now, it is burning through $52 million of one-time federal money that came to the state initially as Medicaid assistance. When those start-up dollars are gone, Dirigo will be in serious trouble. The plan calls for assessing a convoluted “Dirigo tax” of up to four percent of all “claims paid” by private insurance carriers and self-insured companies.

The rationale for the tax is that Dirigo, by covering previously uninsured people, would reduce bad debt and charity care from hospitals and providers by a projected $1,044 per person per year. Supposedly, providers could, in turn, lower their rates. But since only 1,800 uninsured individuals are in DirigoChoice, the annual bad debt and charity care “savings” is just $1.9 million. The bottom line is that we’re spending $15 million taxpayer dollars to save $1.9 million, hardly a resounding success story.

The real difficulty I have with Dirigo is this: With the Governor and his legislative Democrats so fixated on somehow making Dirigo work, they block any alternate ways to make Maine’s health insurance more affordable.

One simple solution would be to allow Mainers to buy health coverage from out of state companies. We know that we could purchase nearly identical coverage – from reputable insurers – at half of what insurance costs us here. We’ve done the research. A family of four could save upwards of $10,000 a year. Republicans submitted a bill last spring to do exactly that. The Democrats said no, we have to give Dirigo more time to work.

The only trouble is, the more time Dirigo gets, the deeper the financial hole it will create. It is time to say that we gave this experiment a fair chance, but that the economics of the thing will never be acceptable. We need to end the charade that Dirigo works, or be prepared to keep shoveling the money into the bottomless pit. I opt for the fiscally responsible thing to do. Pull the plug on Dirigo and stop throwing good money after bad.

Rep. Richard M. Cebra

Naples, Casco and Poland


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