Maine

Status of reform effort: Governor Baldacci’s proposal to reform Dirigo Health was included in legislation that did not pass before the end of the 2007 legislative session.  In April 2008, Governor Baldacci signed legislation that changes the funding mechanism for Dirigo Health.

The Dirigo Health Reform Act, proposed by Governor John Baldacci (D), was signed into law on June 18, 2003.  It was a comprehensive reform effort to provide affordable, quality health care to every Maine resident by 2009.  Within Dirigo Health, Dirigo Choice was developed to provide a voluntary and affordable health care plan for businesses with 50 or fewer employees, the self-employed, and individuals.  The Maine Quality Forum was created to serve as a clearinghouse of information and best practices to improve health. Dirigo Health also utilized numerous strategies to control health care spending.  As of February 2008, 23,000 individuals and over 725 small businesses were enrolled in Dirigo Choice.         

Following the passage of Dirigo Health, Governor Baldacci created a Blue Ribbon Commission on Dirigo Health to suggest improvements to the Dirigo plan.  In April 2007, Governor Baldacci proposed a significant number of reforms to Dirigo Health, including individual and employer mandates.  He also proposed a reinsurance program that would lower the community base rate for premiums in the individual market and would allow insurers to vary premiums based on health status and claims history.  The proposal would be financed by extending premium taxes to HMOs and by insurers using a portion of the premiums they collect to contribute to the reinsurance program.

These measures were included in LD 1890 but the bill did not pass before the end of the 2007 legislative session.  However, the Governor signed LD 431, which allows Dirigo Health to self-administer rather than require it to contract with a private insurance agency.  He also signed LD 841, which extends health insurance coverage for dependents up to age 25. 

In June 2007, the Maine Supreme Court upheld the Savings Offset Payment (SOP), a key but controversial funding mechanism in the Dirigo Health initiative, through which assessments are issued to insurers based on savings generated by the program. On April 16, 2008, Governor Baldacci signed legislation that replaces the SOP with taxes on beer, wine, soda, and a surcharge on insurers. However, the tax was repealed through a 2008 ballot initiative.  The legislation also establishes the Governor’s proposed reinsurance program to lower premiums in the individual market.*

*  2007 Legislative Session.  For Dirigo Health Reform bill text see: http://janus.state.me.us/legis/statutes/24-A/title24-Ach87sec0.html.  LD 1890 see: http://janus.state.me.us/legis/LawMakerWeb/externalsiteframe.asp?ID=280025326&LD=1890&Type=1&SessionID=77. For LD 431  see: http://www.mainelegislature.org/legis/bills/billtexts/LD043101.asp.  For LD 841 see: http://janus.state.me.us/legis/LawMakerWeb/externalsiteframe.asp?ID=280023451&LD=841&Type=1&SessionID=7.