Clarifying Health Care

It was telling last week that Gov. John Baldacci’s proposal to have Maine self-fund its DirigoChoice insurance contained so few details. That properly makes his plan not an assertion but a question: Do the benefits of switching to a self-funded program produce, under a variety of conditions to be examined by the Dirigo board, provide significant benefits to the people of Maine? Do those benefits outweigh any negatives?

That’s where this conversation should begin, and among the first topics that should be discussed is transparency – the ability of the lawmakers, policymakers and the public to see why health-care costs are so high. They must be able to follow the money. That requires more reporting from insurers and health-care providers, which could be in some ways burdensome but in another be a huge saver of time because the endless fights over where the costs drivers exist in health care would be answered.

Self-funding, the subject of a legislative public hearing today, would help with this because it would give the state a better understanding of the details of insurance costs and where Maine might save money. This is part of transparency, and though many questions about self-funding have yet to be answered, it is a real benefit. Transparency also is very much a bipartisan interest – whether lawmakers want greater control of health-care spending or they want consumers to be able to make intelligent choices on their own to shape the market, having good information is crucial.

Sufficient information from insurers means making rate filings, rating formulas and supporting documents part of the public record. If there is some reason to keep specific aspects of this information private, insurers should have a chance to make an argument for it. Otherwise, those interested enough to see where their health-care dollars are going should be able to find out.

The point is to empower consumers, and that should be the point of the current negotiations between Democratic leaders in the Legislature and the insurance industry and hospitals over Dirigo’s savings offset payment. The lawmakers should judge their success primarily by whether, at the end of their talks, consumers are better off. If they are not, no agreement should be made.

Last week, the Maine AFL-CIO and the advocacy group Consumers for Affordable Health Care asked those leaders to examine the profit levels of health insurers in Maine and assess a half-percent assessment on large companies with after-tax profits at or above 2 percent and smaller ones with after-tax profits at or above 3 percent. The money would be used to expand coverage. Their impulse is understandable, and though this idea is not likely to gain much support, it points to what a lack of information creates: consumers can’t see inside the black box of insurers’ costs so they focus on what they can see, a bottom line.

Better, however, that the negotiators remained focused on keeping Dirigo funded through the savings offset payment. The debate over the SOP is contentious because the level of savings is in dispute. But the greater the transparency the less these disputes would occur.

Whether through a self-funded state plan or a private health-savings account, consumers benefit when they are able to know more about health-care costs.