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Bill would create a new funding mechanism and maintain the program Mainers and small businesses rely on
June 5, 2009
Augusta, ME—The Maine House of Representatives finally passed legislation to protect the current members of DirigoChoice by replacing the current funding system, the controversial “Savings Offset Payment (SOP),” with a more stable funding source that will stabilize the program. Many of the current problems with the Dirigo program can be traced back to the funding source, which has been a consistent issue since its inception. The Savings Offset Payment has been difficult to administer and would further endanger those currently on the program if continued. The Legislation replaces the SOP with a fixed monthly fee that will be paid by the same insurance companies that pay the fee currently, and will not cost any more than they are already paying. It will also reopen the program to accept new enrollees in 2011.
L.D. 1264, “An Act to Stabilize Funding and Enable Dirigo Choice to Reach More Uninsured,” was introduced on behalf of the Governor by Representative Sharon Treat, D-Hallowell, House chairwoman of the Insurance and Financial Affairs Committee. It was enacted by the House on a 83-53 vote.
“Even though thousands of people, small businesses and nonprofits are enthusiastic enrollees in DirigoChoice, over the years waiting lists and cost increases have limited the effectiveness of the program, due almost entirely to problems with the funding source,” said Rep. Treat. “This bill will help to stabilize the program and make sure that those individuals and businesses who depend on it for their health care coverage continue to have access to this insurance. This is the right thing to do for Maine, and the right thing to do to maintain a high level of access to health care in this state.”
LD 1264 saves money by cutting administrative waste. The bill gets rid of the current expensive and burdensome funding mechanism that requires costly administrative hearings every single year, which encourage litigation and uncertainty. These hearings cost the state at least $1 million annually, money that could be spent instead on expanding access. Because this drawn-out process required a 27-month timetable for collecting funding from the insurers, while claims must be paid out on an annual basis, most enrollment has been on hold for almost two years. 9,768 people are now enrolled in the DirigoChoice product offered by the non-profit Harvard Pilgrim health plan.
"This maintains opportunity for continued coverage for parents between 150-200 percent of the poverty level, especially at time when families are losing jobs and insurance,” said Rep. Anne Perry, House chair of the Health and Human Services Committee.
The controversy surrounding the financing for DirigoChoice has distracted from some of the successes the program has achieved. When Dirigo began in 2003, the United Health care state rankings showed Maine ranked 19th in covering the uninsured; in the most recent report the state ranks 5th. Since the beginning of the program’s operation, over 29,000 people have been served.
“Dirigo provides an essential service to many Maine people and businesses,” said House Majority Leader John Piotti. “Replacing the current funding system has been a priority for House Democrats and today’s vote reflects that. Dirigo is a viable option for many citizens, and without it the number of uninsured would rise, costing us more in the long run.”
If it becomes law, LD 1264 would allow the program to reopen enrollment by January 1, 2011 with a new more affordable product, and provide consistent funding so that the money available to run the program does not fluctuate from year to year. The bill also charges the Dirigo Board of Trustees to re-design the program to make it more affordable and able to reach more uninsured.
The legislation faces further votes in the Maine Senate. If passed it would go to the Governor.
Contact:
Rep. Sharon Treat, 242-8558
Rep. Anne Perry, 454-7338
House Majority Leader John Piotti, 287-1430
Kyle Leighton, communications director, 287-1433