While the governor’s office hopes consumers will be happy if they only have to pay a little more than $31 million to keep the Dirigo subsidized insurance program going in 2006, opponents say it is not meeting its promise to cover the uninsured and instead is only boosting Medicaid enrollment.

“It’s an absolute dog…that’s eating everybody’s lunch,” said Sen. Karl Turner, R-Cumberland, who was on the bipartisan committee that created the Dirigo Health legislation in 2003.

“We’ve spent more than $40 million of federal money…to essentially insure 2,300 or 2,400 people,” Turner said, referring to a revelation made last week that only one-quarter of those currently in the DirigoChoice insurance program had previously been uninsured.

That news came on top of an admission last Thursday that the state’s Dirigo Health agency had inadvertently inflated current enrollment numbers. Instead of the 8,300 enrollment reiterated earlier last week by Trish Riley, head of the governor’s Office of Health Policy and Finance, the real number is closer to 7,300. The agency hopes to end the year with 7,600 members.

Sen. Michael Brennan, D-Cumberland, who also was on the bipartisan committee that created Dirigo, said too much is being made of the enrollment numbers.

“It’s unfair to say that Dirigo has been a failure or is not working based on what I consider to be somewhat arbitrary enrollment numbers that were predicted in the first year,” Brennan said.

To deflect criticism of the program, the Dirigo Health agency said last Thursday it will be asking for $31.3 million in assessments or fees from private insurance companies and self-insured businesses, or $12.4 million less than it could charge under a recent ruling by the state’s Bureau of Insurance. Those fees, also known as the savings offset payment, most likely will be passed along to consumers through increases in their premiums.

The Dirigo board of directors will make the final decision on the size of the assessment on Nov. 28 after listening to comment from all interested parties. It is still possible that the Maine State Chamber of Commerce or the insurance industry – mainly Anthem – could appeal the assessment in court.

The money will be used to expand enrollment in DirigoChoice by only 2,400 people next year – to a total enrollment of 10,000 – and also pay for enrolling 10,000 parents of Medicaid-eligible children into the Medicaid program. The Dirigo Health legislation that created DirigoChoice allowed for the expansion of Medicaid to parents making up to 200 percent of poverty.

Boosting Medicaid

“They’re trying to salvage the thing by now claiming the people on Medicaid are now under Dirigo,” Turner said. “It’s an unabashed failure.”

“I’m not as preoccupied with the enrollment as some other people might be,” countered Brennan, although he did say it was a “mistake” for the Dirigo agency to predict such high numbers at the start of the program.

Those numbers promised that DirigoChoice – an Anthem product subsidized by the state – would insure the state’s 135,000 uninsured by 2009. The first benchmark was enrolling 31,000 people in the first year.

The legislation also allowed for the expansion of Medicaid, raising the eligibility for parents from 150 to 200 percent of the federal poverty level – or up to $38,700 for a family of four. About 4,000 parents have signed up so far this year. Another allowable Medicaid expansion for childless adults has been put on hold.

It was hoped that working parents eligible for Medicaid would come into DirigoChoice through their places of business, and the employer would pay 60 percent of the premium. That would make DirigoChoice money because the employer would pay a premium and the state’s share of the employee’s coverage would be matched 2-to-1 with federal Medicaid funds. While the goal was that 15 percent of Dirigo enrollment would be made up of these Medicaid-eligible participants, the reality is less than 2 percent.

“We were supposed to attract private money into Dirigo and use it to draw down federal Medicaid matching money, and we were going to have demonstrated savings or reductions in uninsured coverage and charity care,” Turner said. Given the low numbers of uninsured who have enrolled and the few Medicaid-eligible participants signing up through their employers, the program is costing money, he said.

Brennan said the expansion of Medicaid is still a good deal for the state because it draws down the 2-to-1 match regardless of whether the person is enrolled in DirigoChoice or not.

The Dirigo Health legislation also created initiatives beyond the insurance program, including voluntary caps on hospital spending; limits on new health-related construction; and, a focus on preventive medicine and quality. All these things, he said, help save money and justify a savings offset payment.

The notion the savings offset payment would pay for a straight expansion of Medicaid, however, surprised some at last Thursday Dirigo board meeting.

“It’s a stunning development that the Medicaid expansion is included in what the savings offset payment will pay for,” said David Brenerman, an assistant vice president for Unum-Provident. “We thought we were paying for subsidies in the Dirigo insurance program.”

Too little spending

Advocates like Joe Ditre of Consumers for Affordable Health Care want the Dirigo Health agency to request the maximum savings offset payment of $43.7 million so more money can be used to insure those who can’t afford regular insurance. Too much emphasis, he said, is being put on appeasing the private insurance companies.

There is a growing number who need the DirigoChoice program, he said, because they are being priced out of the private insurance market. Ditre pointed to Anthem’s current request for a 20 percent rate hike for those covered in its individual versus large-group plan. If that goes through, he said, “you would have literally thousands of people losing coverage,” because they can’t afford it.

Mary Henderson of Maine Equal Justice, who is on the Dirigo board of directors, also believes the state is going after too little in deference to the insurance industry.

“My real concern is that no matter how much we compromise…we’re not going to get one ounce of help,” she said.

Henderson wanted to know what was going to become of the 3,000 individuals and sole-proprietors on the DirigoChoice waiting list. That group’s enrollment was capped this year because they are perceived to be a higher health risk and therefore more expensive to insure.

Now the state is budgeting to add only 2,400 additional enrollees of all types in the program throughout 2006.

“How much would it cost to bring in more people off the waiting list?” Henderson asked, given that “the goal of Dirigo from the beginning has been universal access.”

Some individuals may not want in now because the Dirigo board has changed the payment rules to save money. The state used to pay up to 80 percent of their entire premium, waiving an employer’s share because individuals had no employers, per se, and were either self-employed, working part-time or out of work. Individuals who sign up or re-enroll in 2006 will have to pay the full 60 percent of the premium that is typically the employer’s share and will be subsidized only on 40 percent of the cost.


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