Will Maine’s Dirigo lead? Other states eye health care plan

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AUGUSTA – Other states have tried – and some have failed – to create universal health care systems.

Now, policy-makers across the country are watching this poor but innovative state to see if the newly authorized health plan called Dirigo – Maine’s motto and Latin for “I lead” – can live up to its name.

The state-private partnership designed to ensure access to health care for all 1.3 million residents will sign up its first enrollees in July.

Questions remain unanswered as to how Dirigo Health will be structured. It has survived one legislative attempt to reduce funding, and the process of hiring an insurer to provide services is behind schedule.

Even bigger questions revolve around money, according policy experts who are familiar with Maine’s program.

“Making something like this work anywhere is an experiment. And we will all learn in the process,” said Jay Wolfson, professor of public health and medicine at the University of South Florida.

The key to success will be how many employers agree to provide coverage to their employees through Dirigo Health and keeping costs borne by beneficiaries in proper balance with those paid by employers, he said.

“The cost is a driving issue,” said Dana Connors, president of the Maine State Chamber of Commerce and a Dirigo board member. Connors agrees that participation by small businesses is a key factor.

Dirigo’s goal is to insure 31,000 people this summer and cover the state’s remaining 130,000 uninsured by 2009.

Employers who sign on, and their employees, will pay for a portion of coverage. In addition, MaineCare – Maine’s Medicaid program – will be expanded to cover more low-income people.

Dirigo enrollees who are not eligible for Medicaid will pay for coverage, with premiums based on ability to pay.

Funding will flow from other sources. The state counts on $52 million in one-time federal fiscal-relief money to start up the program.

Maine also plans to recapture savings by insuring people who now get medical treatment at hospitals, but leave hospitals with unpaid bills. But those savings do not offset the need for a continuing new revenue source to cover the uninsured, said Christopher Conover, a senior research fellow at the Terry Sanford Institute of Public Policy at Duke University.

Savings also are envisioned through voluntary caps on hospital operating margins and annual cost increases.

Dirigo Health’s new executive director, Thomas Dunne, acknowledged challenges and uncertainties as he began setting up the program, but said he is determined to get the job done.

Dunne, a former partner at the Accenture management consulting firm, who is being paid $1 per year to head Dirigo, agreed with his boss that a central goal is to create a market.

Gov. John Baldacci, who made universal coverage a cornerstone of his 2002 campaign, wants to stimulate free-market competition in the health insurance field just as the state did a decade ago with Workers’ Compensation.

The state has no choice but to make it work, said David White, owner of an import car-repair shop near Bar Harbor. White opted to forgo pay for six months to keep his three employees’ health coverage.

“We’re in a financial crisis largely due to health care,” said White, who helps advise Dirigo’s health quality watchdog panel. “You want an economic stimulus package – fix health care.”

Other states have followed their own routes, with mixed success, as they try to keep residents healthy.

“No other state currently has as far reaching a plan as Maine,” said Howard Berliner, a health policy professor at New School University’s Milano Graduate School in New York.

Hawaii, which recently has patterned a program after Maine’s, tried requiring employers to provide insurance for their workers in the 1970s, but was blocked by the courts.

Massachusetts and Oregon adopted “pay or play” laws that required employers to provide insurance or pay a tax to help cover the uninsured, but both were repealed. Oregon went a step further by expanding Medicaid coverage, but that was cut back.

Washington’s pay or play approach faltered but its program of providing sliding-scale health care subsidies still makes the state among the leaders in the expanded coverage game, Conover said. Vermont also has widely expanded its Medicaid program, especially for children.

Tennessee’s Medicaid reform law, which brought about TennCare, has reduced the risk of being uninsured by roughly one-third, according to Conover.

Berliner said states are forced to act when they see no action on health issues by the federal government. But he said it’s unlikely a state can achieve universal coverage without driving business away.

If every state tried to do what Maine’s doing, “it is likely that the federal government would have to get involved,” said Berliner. But “that doesn’t seem too likely in the foreseeable future.”

Maine businessman White is convinced that Dirigo Health will lower premiums in the state’s health insurance market.

“It’s not a perfect plan,” he said. “It is a beginning.”