Agreement reached on health plan Baldacci, hospitals, insurers resolve key differences

AUGUSTA – Maine hospitals and insurers reached a conceptual agreement with the Baldacci administration Thursday on the governor’s Dirigo Health plan to cut Mainers’ health costs and provide coverage for the uninsured, Baldacci’s health policy chief said.

“There’s some shared pain here, but we have an agreement in concept,” said Trish Riley, director of the Office of Health Policy and Finance.

Concerns raised by hospitals and insurers over key issues have been addressed in the deal, said Riley, and other major components of the package remain intact.

After the language of the legislation is reworked, the package will be reviewed by a special 15-member legislative committee that’s been dealing with the health issue. Then the plan must be sold to the Legislature as it moves toward adjournment.

Anthem Blue Cross and Blue Shield’s David Cohen said the agreement passed the insurer’s test that it increase access to health care by those who cannot afford it.

“We really want to work toward finding something that works for the state of Maine,” said Cohen.

Gov. John Baldacci is expected to unveil details of the agreement Friday at the State House.

According to a summary provided by Riley, there’s no change in the provisions calling for premium subsidies for those with incomes under 300 percent of the federal poverty level. The subsidy will be funded by a 4 percent assessment on insurers.

MaineCare, the program that disburses Medicaid funds, also would be expanded to insure more single adults and parents of eligible children.

Maine hospitals had waged an aggressive lobbying campaign against the health care reform plan, warning it would cause many hospitals to close or downsize. Voluntary cost controls that were sought were a major concern to the hospitals.

Under the agreement announced Thursday, consolidated operating margins – not prices – would be voluntarily held to 3 percent after taxes. Hospitals also would be subject to voluntary caps on cost increases of 3.5 percent for a year.

Insurers’ net income would be voluntarily held to 3 percent after taxes.

Before the agreement, Baldacci pressed the hospitals to negotiate rather than fight him in the Legislature.

Baldacci was getting about 75 phone calls and e-mails a day on the issue, mostly from hospital workers who oppose his plan.

Mary Mayhew, a lobbyist for the Maine Hospital Association, defended the lobbying efforts. She said before the deal was announced the hospitals employ 25,000 people in Maine, and those workers have a right to be involved in how the health reform plan takes shape.

Some legislators got so many e-mail messages from hospital workers that their computers lack the memory to open them.