AUGUSTA – Saying it’s increasingly evident that Gov. John Baldacci’s innovative health insurance program, DirigoChoice, “is failing and will fail without substantive changes,” Republican lawmakers Tuesday convened a press conference to announce their plan to “rescue” the public-private plan.

Others at the State House, including the Senate chair of the Insurance and Financial Services Committee, said the media event was nothing more than last-minute political grandstanding by a group that has shown throughout the legislative session its intent to discredit the Democratic governor by undermining his landmark effort to reform Maine’s health care environment. The DirigoChoice insurance product is one element of the governor’s comprehensive Dirigo Health reforms.

Rep. Kevin Glynn, R-South Portland, was the only lawmaker to speak at the noontime event. He was flanked by other members of the insurance committee, including Rep. Jonathan B. McKane, R-Newcastle, and Rep. R. Kenneth Lindell, R-Frankfort, as well as Rep. Joshua Tardy, R-Newport, the assistant minority leader in the House of Representatives.

Retracting their support for holding over until the second legislative session a bill that would affect Dirigo’s structure and operations, Glynn and other committee Republicans Tuesday released a minority report that assures the measure, LD 1577, will be debated on the House and Senate floors within the next week.

Maine is “on the verge of a new tax,” Glynn warned, referring to the so-called savings offset payment, a provision in the original Dirigo law that requires all health insurance providers to pay into DirigoChoice coffers once overall savings in the health care system have been demonstrated. The payments, scheduled to be implemented in July of this year, will be used to fund subsidies that reduce the cost of enrolling in Dirigo.

But Glynn said Tuesday that insurance companies will be unfairly assessed this “tax,” since the governor-appointed Dirigo Health board of directors will be in charge of determining both the savings and the percentage of those savings to be paid to the state. Insurers, he said, will simply raise their monthly premiums to all their enrollees to make up for the loss to their bottom line.

Glynn’s proposal would delay the payments from July 2005 to July 2006. It also would give the Legislature the power to determine how much insurers would contribute, though final authority would rest with the state’s insurance commissioner.

Glynn also called for a stop to what he called “the secret subsidy” – payments from the state to Anthem Blue Cross and Blue Shield of Maine, which is administering the DirigoChoice plan. So far, the Dirigo Health agency has paid about $3 million to Anthem, money held in an account against unexpected costs that may be incurred as DirigoChoice’s enrollments expand.

Though such contingency funds – known as experience modification programs – are increasingly common in the insurance industry and are returned if not needed, Glynn said the payments unfairly subsidize all Dirigo enrollees, including the wealthy.

He said DirigoChoice is fundamentally flawed in that it doesn’t allow monthly premiums to reflect enrollees’ pre-existing conditions and likely high use of health care services. This encourages sicker individuals, rich or poor, to enroll in the plan while artificially keeping premiums low, Glynn said. He called for an end to the contingency fund “kickbacks” with the expiration of the state’s contract with Anthem in 2006.

Glynn also called for greater overall transparency and said DirigoChoice should be more accountable to the Legislature.

“Republicans just want to deep-six Dirigo,” said Sen. Nancy Sullivan, D-Biddeford. Sullivan, co-chairwoman of the insurance committee, said committee members agree DirigoChoice warrants significant changes, including adding “massive legislative oversight.”

However, Glynn, as the ranking Republican on the committee, “has chosen to be an obstructionist” and “has opted to show his style of leadership to be one of distortions and misrepresentations,” she said. “It appears the Republicans have decided not to be at the table when it comes to true Dirigo Health reform.”

Republicans, she said, don’t like Trish Riley, director of the Governor’s Office of Health Policy and Finance, and enjoy “making the governor look bad.”

Tuesday afternoon, Riley said the Dirigo Health reforms, approved by a substantial bipartisan majority in 2003, have become increasingly politicized over time. The legislative session has been “acrimonious,” she said. “There’s been a constant drumbeat of opposition” not only to the insurance plan DirigoChoice but also to efforts to hold down hospital costs, establish quality standards and expand coverage through Medicaid.

The rhetoric has gotten so heated, she said, that “people have lost track of the fact that it’s working.” DirigoChoice enrollments currently stand at about 7,300, she said, a healthy figure for any new insurance product. While she’s open to a shorter delay, pushing the infusion of savings offset payments as far back as next summer would be disastrous to the fledgling program, she said. “The program needs to be funded so it can move on,” she said.

Her greatest fear, Riley added, is that all the naysaying will prove self-fulfilling. The debate in Augusta has already had a chilling effect on DirigoChoice enrollment. “We need to be showing people that this is a stable, ongoing program,” she said.