Seven-point prescription to cure DirigoChoice

Dirigo insurance is presently a tiny and ineffectual program providing coverage for only 2,300 previously uninsured people. The product has become notorious because so many other Maine premium payers (650,000 of them) are now being taxed to benefit so few. Meanwhile, 130,000 other Mainers remain uninsured.

Republicans believe that Maine can reduce the cost of health insurance by modifying failed market restrictions that were imposed 14 years ago. Although an expensive subsidy program like Dirigo is not the GOP’s first choice of remedy, Dirigo has certain obvious flaws that can be fixed.

Here are seven ways to improve the program immediately:

1. Increase market competition – drop the notion of contracting with only one insurer. Open Dirigo’s subsidies to all carriers and agents who will offer coverage conforming to a Dirigo prototype. Dirigo would still provide financial assistance directly to each income-qualified family through a voucher-like system, but the state would no longer select a single carrier.

2. Limit enrollment to those individuals or groups who have been previously uninsured for six months or one year. Stop using taxpayer money to steal market share from competing commercial products. Focus instead on Maine’s 130,000 uninsured who are most greatly in need.

3. Require an asset test for those seeking the subsidy. Remove the rich from Dirigo.

4. Permit carriers to impose a waiting period for pre-existing medical conditions. People should not be allowed to wait until they are diagnosed with illness before signing up.

5. Stop trying to subsidize every co-pay and deductible. Subsidize premiums only in order to simplify administration.

6. Cease supporting Dirigo by taxing other people who are struggling to pay their own medical bills. Fund the Dirigo subsidy from a source other than the misnamed “Savings Offset Payment” (SOP).

7. The Dirigo board should design the subsidy to attract the most private coverage at the least public cost. The Maine Legislature should limit the board to a fixed sum allocated for the purpose.

In anticipation of a Dirigo expansion, the board is presently taxing Maine’s insured population $43.7 million, roughly three times the $14 million that would be required to subsidize the 7,400 people who were covered by Dirigo in December. For this group, the state supplied 45 percent of the total premium. The remaining 55 percent came from member employers and individual insureds.

Public money for Dirigo should be taken from the state’s current surplus or another source that does not tax people’s medical bills. Otherwise, Dirigo will drive as many insureds out of the market as it will save.

Let’s challenge the Dirigo board to see how far a fixed amount like $14 million can go toward affording coverage to the uninsured. In any case, let’s end Dirigo’s feud with the private sector and put Maine employers and insurers to work as partners in helping to cure our health care cost crisis.

Beyond insurance, Maine must do more to address health care costs and quality. There are many undelivered promises from the Dirigo program. We can start now by enacting these seven recommendations while we continue to work on broader changes required to improve our struggling system.

Sen. Peter Mills, of Cornville, is the ranking Republican on the Insurance and Financial Services Committee and a Republican candidate for governor.