The state’s superintendent of insurance was expected to decide by July 14 if a $41.7 million assessment to keep the subsidized Dirigo Health insurance program going in 2007 can be collected from health insurance companies and self-insured businesses on top of the $43.7 million that already is being charged this year.
That assessment is being passed onto consumers who buy health insurance and the employees of self-insured companies.
Insurance Superintendent Alessandro Iuppa held a hearing on the 2007 assessment the first week in July and under law was required to make a decision by the July 14 deadline. The groups opposed to the assessment can appeal his ruling to Superior Court. An appeal of this year’s assessment is pending before the court.
The assessment – called a savings offset payment by proponents and a tax by opponents – is supposed to recoup savings to the health care system that have come about as a result of Dirigo Health legislation.
The Dirigo Health board argued before the superintendent those cost savings total $41.7 million and include:
• $14.5 million in reduced hospital charges.
• $2.7 million in avoided bad debt and charity care because DirigoChoice now covers previously uninsured people.
• $3.9 million in avoided bad debt and charity care because the Dirigo Health legislation allowed for an expansion of Medicaid.
• $5.4 million in avoided hospital construction costs thanks to limits put on capital investments.
• $15.2 million in increased or more timely payments to hospitals and doctors for their Medicaid patients.
Opponents argue only bad debt and charity care savings should be counted, and that is being overstated, since so few people have joined the DirigoChoice insurance program in 2006.
There currently are just over 10,000 people enrolled in DirigoChoice, an Anthem insurance plan subsidized by the state based on a person’s income. There were under 8,000 enrolled at the end of 2005.
The administration also counts 5,000 parents who have been added to traditional Medicaid roles because the legislation that created DirigoChoice also authorized the expansion of Medicaid to include parents whose children already were eligible for the federally subsidized program.
The groups that oppose the assessment include the Maine State Chamber of Commerce, the Maine Association of Health Plans, Anthem and the Maine Automobile Dealers Association. They say it makes health insurance more expensive for those people who have private coverage.
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