Repealing the beverage tax passed by the Legislature in April as asked on Question 1 is a good idea simply because the new taxes would pay for Dirigo Health without anyone being reassured the insurance program would be improved or more accessible to those who need it.

The taxes would cost restaurant owners $4 for a $10 gallon of syrup used to make sodas. Taxes would add 42 cents for each gallon of soda sold, and more than double the taxes on a gallon of beer or wine from 30 to 65 cents.

The taxes, along with a 1.8 percent charge on health insurance claims, all go to pay for a program that serves only 10 percent of those it was intended to help when the Legislature approved it five years ago.

The taxes could encourage Mainers to buy local because Maine breweries are exempted from the tax increases. It’s a nice touch, but also belies the argument that these taxes are justified because these unhealthy products contribute to the high cost of health care.

The exemption hardly compensates for the additional taxes some small business owners would pay. Many of those same business owners have found the Dirigo insurance plan to be too expensive.

There are examples of residents who have found Dirigo Choice, the insurance plan created by Dirigo Health, to be an affordable alternative plan. South Portland resident Jean-Claude Poulin pays $410 for a policy that helps pay for treating his abnormal heart rhythm and no longer has a $15,000 deductible.

But despite grand intentions and bipartisan support in the Legislature for Dirigo Health five years ago, the plan has never achieved what it was intended to do while costing more than $50 million in federal funding and a total of more than $100 million since 2005.

A simpler tax formula would eliminate the complicated Savings Offset Payment formula that ultimately taxes the business owners who provide private plans for employees and bring $16 to $40 million to Dirigo Health, but it seems unlikely to allow the plan to approach its goal of insuring 130,000 to 160,000 people just by knowing what has already been spent.

Federal matching funding for Dirigo Health has since been eliminated. It is time to consider whether eliminating provisions like guaranteed issue, in which companies cannot refuse policies, or state subsidized high-risk pools for those who might be turned away by private companies are better to drive down insurance premiums.

The campaign by Fed Up With Taxes to repeal the beverage tax is funded with $1.6 million from industry giants such as Anheuser Busch, Coca-Cola and Dr. Pepper. Ordinarily, that kind of out-of-state support brings indignant howls about how big companies from away are trying to spoil local ways of life.

But sneaking an exorbitant tax through the final hours of the legislative session in April without proper examination for how it would affect the state’s small business owners of the state is no better.

This is especially true when what is needed is a thorough reconsideration of how and whether Dirigo Health is the best method to provide health insurance, not the best way to pay for it.

David Harry, editor


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