Responding to a call from Democratic leadership to suggest ways by Friday to improve Dirigo Health insurance, representatives from business, insurance and health care will recommend getting rid of the $43.7 million assessment to fund the program.

The way it is set up now, that assessment – or what opponents call the Dirigo tax – would be charged to private insurance carriers and self-insured businesses and ultimately could be paid by the people they cover.

Senate President Beth Edmonds and House Speaker John Richardson jointly called interested parties together last Thursday in the speaker’s office to ask for their feedback. Richardson said the group told him, “We want to see Dirigo succeed and they want to be helpful.”

While Richardson didn’t want to predict what ideas would come back, Dana Connors, head of the Maine State Chamber of Commerce, said Monday the immediate goal would be to find another way to fund the program.

“We need to take out the conflict of the moment – the contentiousness around the funding mechanism,” Connors said, and “find a short-term alternative to set that aside. It would not be permanent, but get us between now and the time this committee could look at the long term.”

Connors said the chamber, health care providers and insurance carriers “have been working together with an eye on improving not destroying” the Dirigo Health program. They feel the assessment is unfair since it would be paid by those employers that provide health insurance to pay for those that don’t.

The stakeholders group invited to the meeting included the Maine Hospital Association, Anthem and Aetna insurance companies, Maine Small Business Alliance, Maine Health, Maine Health Purchasing Collaborative, Maine Association of Health Plans, and Bath Iron Works. All have been involved in Dirigo Health from the start. Several legislators also were in the group, including some Republicans who crashed the meeting.

While no one wanted to go on the record with specifics Monday, one idea being floated in the Statehouse halls is to fund DirigoChoice this year either through a general fund appropriation or with money the Dirigo agency currently has in its account.

The assessment – known as the savings offset payment – has become a political problem for Gov. John Baldacci because Anthem – the dominant insurance company in the state – has told its customers rate hikes this year include the fee.

The size of that fee was determined last year by the superintendent of insurance, who said $43.7 million had been saved in the health care system as a result of Dirigo initiatives – largely through voluntary spending caps at the state’s hospitals. Only $2.7 million has been attributed to reduction in bad debt and charity care through insuring the uninsured, which was the original goal of the program.

The invitation for feedback comes as a bill sponsored by Sen. John Martin, D-Aroostook County, is making its way through committee that would prohibit insurance companies from passing along the assessment to their clients through premium hikes. Insurance companies say if they can’t pass along the assessment it will make it unprofitable to continue to do business in Maine.

Speaker Richardson said the question of whether Martin’s bill has the votes to pass in the House is premature. Senate President Edmonds said she hasn’t polled her caucus yet, but believes passage was a “distinct possibility.”

Still, Edmonds said, she expects changes to the assessment will be suggested by the stakeholders.

“People are talking about payment and there are other ideas about administration,” she said. “Personally, I feel everybody needs to face the fact that everybody’s got to give,” to address the problem of the uninsured. “A funding mechanism that takes the insurance companies out or anybody else out,” won’t work. Edmonds said.

“I don’t have a predisposed notion of how we should end this. The thing that strikes me is there’s a lot of complaining going on out there, but I don’t see people yet coming up with a reasonable solution. A solution that axes the whole thing is not a reasonable solution,” she said.


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