Single-payer plan still touted for state Governor pursues alternative idea

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AUGUSTA – In the excitement surrounding Gov. John Baldacci’s push to reform health care in Maine, proponents of a Canadian-style, single-payer health plan are rallying behind a bill to keep their project on the front burner, too.

Baldacci, though, has rejected the controversial single-payer model in favor of a more moderate, fast-track approach spearheaded by Trish Riley, Baldacci’s choice to head up his newly created office of Health Policy and Finance.

Meanwhile the Health Care System and Health Security Board, created by the last session of the Legislature, is still alive.

Members of the legislatively created board say their analysis so far supports the feasibility of a single-payer system, and they want more time to flesh out the details.

Even though the state may not be ready to implement the plan, they say, stopping work amounts to scrapping the analysis they’ve done so far.

Board chairman Rep. Paul Volenik, D-Brooklin, said Thursday the commission still had important work to do in researching an administrative structure for the model, managing the transition to a tax-based system and other long-term cost-saving measures.

Volenik, a career proponent of the single-payer idea, described the governor’s plan as a “stopgap” measure that “could be viewed as transitional,” with the single-payer approach as the outcome.

He said a single-payer system would be cheaper to operate because it eliminates the insurance industry.

Although he supports the governor’s reform plan, Speaker of the House Pat Colwell, D-Gardiner, also wants to see Volenik’s group continue its works.

Colwell said Thursday that everyone shares the same goal: Make sure every person in Maine has health care coverage.

“No matter how we get there, we need to get there,” he said. “But I also think we should not close any options.”

Recharging the single-payer study board while Baldacci’s appointee Riley continues her work simply ensures the single-payer option will be fully fleshed-out if and when the time comes to implement it, he said.

The governor has indicated little interest in pursuing the radical changes required in a single-payer plan, and has charged Riley with instituting a more incremental approach, with a bill ready for legislative action by the end of April at the latest.

Riley acknowledged Thursday the health security board’s work has provided important information on benefit models and costs to the state, but “now the governor wants all hands on deck to move his plan forward.”

The distinctions between the single-payer concept and Riley’s approach are complex but important.

There is general agreement among most people driving the health care debate, said Rep. Christopher O’Neil, D-Saco, chairman of the Insurance and Financial Affairs Committee. The overall goal, he said, is universal coverage, the extension of affordable, meaningful health care insurance to all Maine residents regardless of income or employment status.

“Everyone agrees that health care costs are too high, that the insurance market is unraveling and falling apart, and that the state has to play an active role in change,” O’Neil said.

He said proponents of a single-payer system want the state to play “the role” by establishing its own nonprofit insurance plan, funded by payroll taxes and public reimbursements, and extending equal coverage to all residents.

Under the plan envisioned by Volenik, policyholders would not pay insurance premiums but would make co-payments for services based on their income. The market for commercial insurance would be undercut so dramatically that the state program would effectively and rapidly become the only insurer available, according to O’Neil.

An actuarial study commissioned by the health security board, Volenik’s group, shows that a single-payer plan implemented now would start saving Mainers money in 2008, when the cost of the plan would be about $8 billion instead of a projected $8.2 billion for the current system, O’Neil said.

Within a few years, savings would be more dramatic, perhaps as much as $1 billion per year, while providing coverage to all Mainers.

“Single payer is a laudable goal, and one to which we can aspire,” said O’Neil. “But many people feel it’s a cumbersome undertaking, and that the transition alone could be economically devastating.”

Effectively funding such a program would require changes to Medicare and Medicaid reimbursement policy, he added, changes the federal government shows little sign of undertaking.

The fast-moving approach favored by Baldacci and Riley moves toward universal coverage by adding a nonprofit state program to the existing commercial market in Maine. The program, still in the design stage, may be state-administered or possibly managed by one of the current commercial providers, but in either case it will answer to a state-appointed board of directors.

The clout behind the program would be in its nonprofit status and in the buying power of its large pool of high- and low-risk participants, which is likely to include all state and municipal employees at start-up.

Other targeted subscribers include low-income families and individuals who don’t qualify for Medicaid, as well as workers displaced from their jobs by foreign competition.

Riley doesn’t rule out the possibility her plan may snowball into something larger but says she’s not considering the single-payer model right now.

“At this point we’re looking at an incremental process we can implement right now,” she said. “We are committed to doing this thing by April. This isn’t a taxed-based system, it’s not dependent on Medicare or Medicaid. It’s a nonprofit plan that we can set up right now without making any changes, that people can buy into right now.”