Comprehensive Reform in Maine: Dirigo Health

Dirigo Health was passed in 2003 with goal of providing universal coverage by 2009 (approximately 140,000 uninsured in 2003). The policy components focus on access, cost and quality.

Governance:
Dirigo Health is governed by the Bureau of Insurance, the Department of Human Services, with primary direction by the Dirigo Health Agency and the Office of Health Policy and Finance

• Dirigo Health Agency
  • Created as part of the Dirigo Health Legislation
  • Run by an independent Board of 5 Directors nominated by the Governor and approved by the Maine State Senate
  • 3 ex-officio members from the state government also serve on the board
  • Supported by a staff of 12
• Governor's Office of Health Policy and Finance 
  • Directed the development of the Dirigo Health Reform Act 
  • Serves as a liaison to the new Dirigo Health Agency 
  • Responsible for coordinating the implementation of Dirigo across state agencies

Public Sector: DirigoChoice Health Insurance Product: A privately administered health insurance product available to small businesses, self employed and some individuals who are not offered insurance through their employer

• Small employers access to subsidized health insurance through one large private insurer – Anthem
• Sliding scale subsidies for enrollees below 300% FPL

Insurance Market: Cost Containment and Quality

• Rate regulation in small group market
• Voluntary caps on cost and operating margins of insurers, hospitals and practitioners
• Global budget for capital improvements

Employer-based: Eligibility for small employers to participate in Dirigo

Other: Creation of Maine Quality Forum, charged with advocating for quality and helping consumers make good choices

Financing:

• Cost containment through rate regulation in small group market, voluntary caps on cost and operating margins for insurers, hospitals and practitioners, global budget for capital improvement, one year moratorium on Certificate of Need activity
• Employer and individual contributions
• General Fund revenues (first year only)
• Federal match for Medicaid/SCHIP premium subsidies for eligible who buy-in to DirigoHealth Choice
• "Savings offset payment" – recovery of reductions in charity care and voluntary savings targets from insurance carriers and TPAs
  • Offset Payment Assessment
  • 1.85-2.41% of paid claims
  • $43.7 million (yr1); $34.3 million (yr2)
  • Assessments upheld by Maine Supreme Court-June 2007

Challenges:

• Low take-up rates (10,700 currently enrolled, 31,000 were projected to enroll in the first year)
• Higher administrative costs due to low take-up
• Higher than expected claims due to "pent-up demand"
• Legal challenge to the estimated cost "savings offset payment" ($43.7 million, year 1, $34.3 million, year 2), upheld by the US Supreme Court

Proposed Changes:

• Individual and employer mandates with financial penalties
• Ending SOP and creating new assessments to fund program
• Higher subsidies for DirigoChoice
• Creating separate high-risk pool
• Switching from private to state administration of DirigoChoice
• Instituting Medicaid cost controls
  

For more information: Dirigo Health website

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