The governor’s special commission on the Dirigo Choice Health Plan is trying to meet a December deadline to decide alternative ways to fund the state’s subsidized insurance plan going forward, with the unpopular fee on private insurance – approved for 2007 at $34 million but currently on hold – lurking in the wings.
The decision whether to use all or part of the fee, known as the savings offset payment, to get the program through next year also has to be made this month, according to Dr. Robert McAfee, chairman of the Dirigo Choice board of directors.
“At the moment we have no sustainable funding beyond July 1,” McAfee said, and under statute his board has to decide whether to reinstate the controversial assessment by the end of this year.
The board could ask for just a portion of the $34 million, approved earlier this year by the state’s superintendent of insurance.
A diverse, 19-member commission has been meeting since August to propose alternative ways to fund the Dirigo Choice insurance program, currently covering just under 12,500 people. Whatever it recommends will have to be approved by the incoming Legislature, which begins meeting in January.
While there is support for funding some or all of Dirigo Choice through the state’s budget, rather than assessing a fee on the privately insured, there is no consensus yet on what tax or fee should be raised to pay for it.
Dirigo Choice was initially designed to insure the uninsured, but also has been attracting lower-income people, who previously were in high-deductible plans. Part of the money for the program has been used to expand traditional Medicaid to 5,090 low-income parents, whose children already were eligible for Medicaid.
As of last week, the commission appeared to be a long way off from reaching a consensus on funding, and was still grappling with the issues of overall insurance market reforms to make health coverage more affordable for all. And that frustrated some members.
“We have 45 minutes to talk about the single most important item on the agenda,” said Gordon Smith of the Maine Medical Association, toward the end of the commission’s five-hour meeting last week.
There currently are two more meetings scheduled this month – one on Dec. 11 and the other on the Dec. 19 – with a report due to the governor before the New Year. The commission could ask for an extension, but hasn’t decided to do that yet.
While Smith proposed putting off market reforms until after a funding method was approved, others on the commission, representing hospitals, insurance carriers, advocates and businesses, said they couldn’t vote on one without the other.
“It’s a non-starter for us to talk about revenues without talking about cost containment,” said Joe Ditre, head of Consumers for Affordable Health Care.
A list of market reforms scheduled for discussion at the next meeting includes:
* Controlling provider costs by expanding the state approval process for all major capital investments, and reinstating provider rate setting.
* Regulatory changes allowing sole proprietors to purchase group coverage; requiring discounts for worksite wellness and non-smokers; and, making insurance rates easier to understand and compare while loosening restrictions on how far people can be asked to travel to get care.
* Mandating coverage, both to employers and individuals.
As if that list weren’t controversial enough, the commission’s main charge is finding a politically acceptable way to fund the Dirigo Choice health insurance plan. The savings offset payment was approved in the legislation that created Dirigo Choice, but caused a backlash when it was finally instituted this year. Private insurance companies – the largest being Anthem – and self-insured businesses currently are paying $43 million in fees for 2006, and largely passing that onto consumers through their insurance premiums.
The commission has discussed, but not settled on any other funding mechanism, and some members say the Legislature should decide how to fund DirigoChoice in the overall state budget.
“They should come up with a way to help us fund this program,” said Kevin Gildart of Bath Iron Works, who proposed simply saying, “It’s the general fund and let elected officials decide if this program is important to them.”
Commission Chairman Sandra Featherman countered that legislators needed some political help.
“We have to give elected officials some room to run for cover,” she said, by having the commission put funding alternatives on the table.
Those funding methods so far, according to the commission’s past meeting minutes, include sin taxes, snack taxes, a part of the sales or income tax, motor vehicle fines and assessments on those companies that currently don’t provide health insurance.
Some on the commission said fees on health care providers and insurance companies should still be part of the mix.
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