FOLLOWING ON DIRIGO

Now that they’ve had time to read the bill that was supposed to save Dirigo health, some Democrats are having late-session second thoughts. That’s understandable; the deal gave away a lot while providing the state with few assurances that the health care program will be around a year or more from now.

The Democrats may have thought they were buying time for Dirigo to prove its worth by reducing what is known as the savings offset payment (SOP) – the amount Maine’s insurance superintendent said Dirigo saved the health care system – from $43.7 million to $23 million. They may have thought they were preventing that lower number from being passed on to ratepayers.

Most important, they may have thought part of the exchange for this deal was that businesses suing over Dirigo’s savings offset would drop their suit. But they were wrong in each case.

The amendment supported by majority Democrats before the recent recess merely said Dirigo would receive funding “not to exceed $23,000,000.” It could be substantially less. And the standard for passing on costs to ratepayers requires them not to count the savings as profits – a restriction that doesn’t seem serious – and to use their best efforts to limit the impact on rates, but it never says rates cannot be affected by pass-through costs. That lawsuit, says Dana Connors of the Maine State Chamber of Commerce, remains.

This is not to say the business and insurance group that opposes the current configuration of the SOP bargained in bad faith. There’s every reason to believe its members were sincere and honest. They just bargained harder; they handed Democrats the opportunity to prevent some of the SOP from being passed on and Democrats leapt at it without fully appreciating how much they were giving up. They had a strong incentive to act this way: the fear of getting clobbered by a wealthy insurance industry at election time.

What to do? First, the party should understand the deal it has negotiated combined with a lower offset figure for next year puts Dirigo in a compromised position – new enrollment for non-Medicaid clients will be capped at 1,000. Second, if as many Democrats who are complaining quietly about that deal now make themselves heard through their vote, the bill, a much-amended LD 1935, will be in trouble. Third, Democrats should have enough party discipline to prevent this deal from being linked to another bill to self-fund Dirigo – they should pass the self-funding bill first and debate LD 1935 on its own merits.

There’s also nothing wrong with postponing LD 1935, letting the lawsuit over the SOP play itself out and learning from the law court’s conclusions. With Dirigo, getting things in the right order sometimes means following rather than leading.