DIRIGO’S NEXT PHASE

A judge’s ruling that the savings brought about by DirigoChoice, the Baldacci administration’s health care coverage plan, are appropriately calculated and an appropriate mechanism for funding the plan won’t settle disputes about the initiative but it provides a solid direction for a commission that is currently reviewing Dirigo and its funding.

A decision by Cumberland County Superior Court Justice Roland Cole, released Monday, had three Maine components, each in response to legal challenges to Dirigo from business and insurance groups. Justice Cole ruled that the Dirigo Health Act is constitutional, that Dirigo did result in savings which were appropriately used to fund the system, and that the savings – $43.7 million – were appropriately calculated.

Opponents of Dirigo have long said that the so-called “Savings Offset Payment” was a tax. Justice Cole flatly rejected that logic. “Savings offset payments are the means by which the Legislature redistributes savings in the health care system in order to make health insurance available to a greater percentage of Maine citizens,” Justice Cole wrote, comparing Dirigo to the Maine Milk Pool. “The savings offset payments are appropriately characterized as costs of administering a program under the police power of government, not a tax,” he added.

Dissatisfied with the Savings Offset Payment, critics of the health insurance program took to calling it the Dirigo tax and insurance companies threatened to raise rates to cover it. Gov. John Baldacci, in his State of the State address, said he would oppose attempts to pass this “cost” on to consumers. A bill that would have prevented companies from passing on this cost failed in the Legislature.

Meanwhile, the Maine Association of Health Plans, the Maine State Chamber of Commerce and the Maine Automobile Dealers sued the state to stop Dirigo’s funding mechanism, which would have shrunken, if not killed the program, which aims to increase the number of Maine residents with health insurance.

Under Dirigo increased insurance coverage is paid for, in part, by reducing health care costs and using those savings to pay for increased insurance coverage. The insurance and business groups say they will appeal the ruling to the Maine Supreme Judicial Court.

Despite the court ruling, a large problem remains the absence of information about the costs of health care. Lawmakers, policymakers and the public currently have a hard time finding out why health care costs are so high because they can’t follow the money. That would require 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 of drivers exist in health care would be answered.

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 debate over the Savings Offset Payment is contentious because the level of savings is in dispute. The greater the transparency the less these disputes would occur.

Building on Justice Cole’s decision, the governor’s Blue Ribbon Commission, which meets today, can return Dirigo’s focus to its goals of universal health care coverage and high-quality care.