Republicans want to save Dirigo

The Bangor Daily News editorial on Dirigo Health, published Nov. 9, went way over the top. It makes the preposterous charge that Maine Republicans seek to destroy Dirigo for political gain. Adding insult to injury, it argues that we are so determined to kill the program that we’d let thousands of Mainers go without health care coverage to do it.

Those claims are utterly outrageous. Republicans have proposed countless alternatives to the Dirigo program, all of which have proved successful in other states. Many of us voted to put Dirigo Health in place two years ago, and many Republicans remain supportive of those elements of the program that appear promising.

From the start, though, those of us who philosophically favor free-market reforms over state-run programs have been skeptical. The BDN has mischaracterized this as some kind of Pavlovian rejection of the plan because it originated with the other party. In so doing, the paper has dismissed outright the legitimate concerns we have expressed about the program. Many of those concerns date back to the very start of the Dirigo Health effort and have proven, in the two years since, to have been well-founded.

Republicans were skeptical, for instance, about the way that Dirigo Health would pay for itself. As planned, it was to rely on a combination of premium payments by employers and federal Medicaid matching funds. For that funding to become available, though, Dirigo had to create a low-cost insurance product that small businesses would buy. It also would have to ensure that at least some of the program’s participants were Medicaid-eligible.

Survey results indicate, however, that small business participation has been well below estimates and that just 1 percent of Dirigo Health enrollees qualify for Medicaid coverage, far less than the anticipated 15 percent. Just like that, the two major sources of funding are missing; thus seriously jeopardizing the program’s fiscal sustainability.

Dirigo’s fragile financial base has been further exposed by the recent controversy around the so-called “savings offset payment.” This deals with how much money the program has actually saved. The Dirigo Health Agency originally credited itself with saving $233 million. The DHA board cut the figure to $136 million. Insurance Superintendent Alessandro Iuppa recently placed the amount saved at $43.7 million – nearly $200 million below Dirigo Health’s own estimate.

A closer look at the figure, though, reveals that nearly all of those savings were gained by hospitals postponing capital improvements, not by the DirigoChoice program’s having provided health coverage, thus cutting down on bad debt and charity care, as had been promised originally.

The fact is that despite two years of effort, DirigoChoice has not generated enough business to have any real impact on health care costs, despite the $53 million in one-time money used to launch it and the $43.7 million it is expected to gain next year from the savings offset payment. For nearly $100 million that will soon have been spent on this program, much greater results should have been realized. This is a source of legitimate concern.

Despite claims by the BDN, we have done more than simply express unease about the program. From the start, we have suggested improvements that, had the Baldacci administration ever been open to them, might have turned Dirigo into a far more successful operation.

For one, Republicans have suggested that DirigoChoice be transformed into a high-risk pool, focusing its energy and resources on those with the most serious medical issues. One reason that DirigoChoice has not seen more savings is that the people enrolled are not particularly sicker than anyone else. Dirigo Health’s own survey found that most of the people in the program had little or no medical issues in the year they were enrolled, so their access to care is not saving anyone money.

If Dirigo were made into a high-risk pool program, the state could enroll the very sickest people and give them subsidized care. By removing them from the rolls of the commercially insured, we could lower the risk for private insurers, and thus lower health

insurance premiums for everyone.

Republicans also have suggested changing the state’s insurance regulations to draw more competition into the insurance market. Dirigo has attracted scant attention from businesses because its premiums are no cheaper than what is found on the private market. With reforms to the state’s “community rating” and “guaranteed issue” mandates, more insurers would enter the market. That would drive down premiums for both Dirigo enrollees along with everyone else. Plus, more competition means better bids to administer Dirigo, which frees up resources for care and cuts costs.

Dirigo would also benefit from the integration of Health Savings Accounts. By enacting this reform, which would provide health care dollars in the form of cash accounts to be used only for medical care, Dirigo could dramatically cut administrative costs, encourage patients to shop around for less expensive care, and thus lower costs through competition. Using HSAs, patients become customers, not contracts. They take ownership of their care and become advocates for their own health, all of which Dirigo claims it wants for those enrolled in the program.

None of these suggested reforms to Dirigo has evoked the slightest interest from the Baldacci administration, however. It appears more interested in plowing ahead with a fatally flawed program than in sitting down and compromising on a better approach. This is a very bizarre style of public policy management.

The bottom line is this: Republicans are motivated not by some kind of political vendetta. We are motivated by the need to make Dirigo work better. We have been undercut by an administration that refuses to see that its prized program is imploding and refuses to work with us to fix it.

To suggest, as the BDN does, that the only option to propping up this failed program is to cut health care to thousands is laughable. To suggest further, as the BDN does, that Republicans secretly want thousands to lose health insurance is an outright fabrication.

We have concerns about the program that are legitimate, and ideas about what to do that are worth listening to. It’s a shame that the BDN is no more interested in engaging in a productive dialogue than the Baldacci administration.

Rep. Josh Tardy is assistant leader of the House Republicans. Rep. Stephen Bowen serves on the Appropriations and Financial Affairs Committee.