The Dirigo Health Agency has spent $7.2 million to date even though the state’s subsidized insurance program has only been covering people for a little over two months – prompting Republican legislators to question whether promotion and overhead costs are out of line.
The biggest chunk of money – $3.2 million – went to the Department of Health and Human Services in the current fiscal year to fund 13 permanent positions and five temporary ones assigned to work on the program. There are 13 temporary positions now filled in the agency itself – with a separate office in downtown Augusta – and a request to make 18 positions permanent in the 2006-07 budget.
Another eight positions in the Governor’s Office of Health Policy and Finance also support the agency, but work on other health planning projects, including research and development of statewide health policies.
Anthem agents, paid by the insurance company, sell the insurance, issue cards and process initial claims through a joint venture with the state. So far, they have sold the insurance, known as DirigoChoice, to 2,666 people through February, with another 1,000 or so expected to come on in March. The goal of the program is to insure Maine’s 130,000 uninsured by 2009.
About $877,000 has been spent to market the insurance and to generally inform Mainers about state health planning around the goals of reducing costs and improving quality. The money – including $557,000 in grants – paid for radio, TV and newspaper ads, public relations consulting and some Web site and newsletter designs.
The rest of the money came out of the agency’s operating budget, being funded by $53 million in start-up funds for Dirigo that initially came to the state from the federal government as supplemental Medicaid dollars.
“It just looks like growing government to me,” said Rep. Darlene Curley, R-Scarborough, who sits on the Appropriations Committee, which is reviewing the governor’s $5.7 billion biennium budget to make a recommendation to the full Legislature.
Curley said she is worried about the growing role of the Office and Health Policy and Finance, asking if it couldn’t be folded into DHHS. She also questioned why the state needed to do all its own original research on health issues and costs.
“Do we have to do everything ourselves?” she asked.
Sen. Richard Nass, R-York, the Republican’s Senate representative on Appropriations, described Dirigo as “faltering” in terms of the numbers it was attracting and questioned whether those who were signing up were truly uninsured or simply switching from another plan.
Defending Dirigo
While the Dirigo health plan was passed with Republican support in 2003, some Republicans now are distancing themselves from it, saying it hasn’t delivered on promises of affordable health insurance for small businesses. Gov. John Baldacci, however, touts it whenever he can and calls it one of the crowning accomplishments of his first term in office.
Dirigo Health Agency Director Karynlee Harrington defended the program and chastised Republican legislators for their seeming barrage of criticism about it last week.
“Why don’t we have the numbers?” in terms of enrollees, Harrington asked the committee. “It’s so challenging when it (DirigoChoice) is constantly criticized.”
While admitting the plan isn’t perfect, she said it’s needed to address the problem of uninsured in Maine.
“I have a lot of passion for this plan,” she said. “Right now we need to do something.”
Harrington also refuted claims by some that the process to get enrolled is confusing. “It’s not cumbersome,” she said. “There are two options that people can choose from,” and the rest is done behind the scenes by DHHS, which calculates if people are eligible for the state to subsidize part of their premium.
Under the program, employers pick up 60 percent of the cost of the monthly premium for employees – starting in the $300-plus range for individuals. Family policies can run from $900-plus to more than $1,000 per month, but the employer is only responsible for the employee’s share. The employee’s share is subsidized by the state if individuals fall into certain income categories, starting with workers making less than 300 percent of the federal poverty level.
Sen. John Martin, D-Aroostook, agreed the application process is simple enough. He shared with his fellow Appropriations Committee members that he is an authorized Anthem agent and sells DirigoChoice.
“It’s an easy form,” Martin said, characterizing it as “one of the simplest applications” he’s used.
Enrollment numbers
The administration had hoped to have the DirigoChoice subsidized insurance program up and running by last summer, but it only started covering people in January. In the first month, 1,700 people signed up; in February 966 enrolled; and the agency is predicting 1,080 in March – making the year-to-date total 3,746, if the March numbers come to pass.
Trish Riley, director of the Office of Health Policy and Finance, said the first quarter has exceeded expectations, although the goals have been a moving target.
To meet the original first-year goal of signing up 31,000 people, 27,254 more people will have to come on board in 2005.
That enrollment expectation is now being lowered, Riley said, because the state has put on hold its proposed expansion of Medicaid to adults without dependent children. That expansion and one that is going forward for parents at 200 percent of federal poverty, were expected to add to the ranks of DirigoChoice.
The idea was that some of these new Medicaid enrollees, who are part of the state’s working poor, would be signed up for insurance by their employers, paying 60 percent of the premium. The state, through Medicaid, would pick up the employee’s share of costs, triggering a 2-to-1 federal match of money that would help keep the Dirigo program going.
Expectations now are being lowered to 23,000 enrollees in 2005.
The next hurdle the program faces is coming up with a plan to tax insurance companies and self-insured groups, who will be asked to contribute a piece of their premium revenue – up to 4 percent – to the Dirigo Health Agency’s operating budget.
Those savings are expected to come from cost controls put on hospitals and a reduction in bad debt and charity care that comes as a result of having more people in the state insured. How that tax will be applied has to be approved by the Legislature, which is expected to review a bill later this session.
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