Meeting in Augusta, the Dirigo Health Board of Directors agreed to assess a fee of $42 million on insurers for the next year. "We would be able to maintain our existing levels of enrollment." Dirigo Health Agency Executive Director Karynlee Harrington says the challenge will be to expand access to the program, which subsidizes health insurance for income-eligible people. About 16,000 people are currently enrolled. "Now our hope is that we are going to be able to, as we look forward to 2010, make some benefit design or some subsidy changes so that we can restructure the program so we can cover more with less.""

 

Over the last several years that the fee on insurers has been in effect, the industry has haggled with the state over how much the amount should be, with both sides spending millions of dollars on consultants and lawyers. The fee is supposed to reflect the savings that Dirigo’s reforms bring to the health care system, such as hospital cost controls. But insurers, backed by the business lobby, say the state always overestimates the savings. A lawsuit is currently pending in Kennebec County Superior Court that challenges the fee.

 

Board members meanwhile, are considering new ways to pay for Dirigo, and hoping that among the dozens of new lawmakers voted into the Legislature this last election, there will be supporters of some alternative funding system.

 

Board member Mary Anne Turowski of the Maine State Employees Association says legislators should understand that there are 2,000 people on a wait list to enroll in Dirigo. "So imagine if it was a providable program with funding that could be marketed. There would certainly be a market for it. That's stunning to me. Absolutely stunning."

 

This is also despite the fact that Dirigo premiums are going up an average of six percent for small businesses and an average of ten percent for individuals, starting in January. Board member Joe Bruno, a former Republican state legislator, says the agency must also address criticism of the program. Republicans stress that Dirigo has fallen short of enrollment projections, and that the fee on insurers is passed onto consumers.

”I think you need to give a balanced approach to this and say, ‘The people who don't like this program this is what they say, and these are the challenges we face.’ But if you only pat yourself on the back all the time, it just doesn't go very far, in my opinion."

 

"It's become an ideological battle between the Republicans and the Democrats, with every Republican trashing the Dirigo Health product." Gordon Smith, executive vice president of the Maine Medical Association, is a supporter of Dirigo Health who favors funding the program through raising the cigarette tax, an idea that lawmakers rejected last session, and assessing a flat fee on insurers. In Smith's view, however, the biggest obstacle to this plan is actually a Democrat, Governor John Baldacci. "Although it's his program, he is adamant in his view of no new taxes, and I'm just hoping by the end of the session that the governor will recognize that you need to keep things like Dirigo going and would accept a modest tobacco tax." Smith says in this struggling economy, where people are losing not only their jobs but their health insurance, it's more important than ever to keep Dirigo going.

 

But the economic downturn is all the more reason that Dirigo should have to compete with other programs for money from the state's general fund, says Kris Ossenfort, spokeswoman for the Maine Chamber of Commerce. "When the state's looking at an $800 million shortfall and making difficult choices about how it's going to pay for MaineCare, how it's going to pay for education, you can't have a discussion about this program separate and apart."

 

For now, though, the program is funded by the fee on insurers, and the debate continues.

 

Insurers and the chamber are saying that the amount just approved by the board should actually be less. They say that the Dirigo Health agency should give back $14 million because in one of the years it didn't spend as much money on subsidies as anticipated.

 

Ossenfort says that the chamber may appeal the board's decision.