MAINE’S PLAY OR PAY

When legislative Republicans announce Maine’s Medicaid program is unsustainably expensive the day before Democratic Gov. John Baldacci describes reforms to lower health care costs, all of Maine can rejoice in the cooperative spirit that permeates Augusta. Or perhaps that’s a little optimistic.

Still, the movement on health care reform was encouraging, and Gov. Baldacci clearly had Republicans in mind when he proposed some of the changes to Dirigo. But his largest proposals affect all of Maine, including by starting the state on a path to “play or pay” coverage, in which employers can either offer insurance – play – or pay into a fund that will purchase insurance for the employees. Nearly as important, the state would change the charge of the state Bureau of Insurance, expanding its oversight of health insurance rates, especially as they support insurance administration.

Certain to irritate health care advocacy groups is the plan’s reinsurance pool, which is expected to provide subsidies to about 400 expensive beneficiaries with protections such as no lifetime cap and guaranteed issue. Lawmakers should welcome a clear accounting of the benefits of creating this pool before including it in the overall package.

Self-insuring the state’s Dirigo health plan may save money and will very likely give it greater visibility as residents learn how good the benefits are under the plan. Extending Dirigo’s savings offset payment makes sense, though the SOP will eventually become a hospital-payment surcharge and be paired with the pay-or-play funding to further expand Dirigo. The state should keep in mind the reason the SOP exists – to force savings out of the system – and ensure that important idea is not lost in reform.

The governor’s new health plan would also reform part of Medicaid in Maine, called MaineCare, by standardizing rates, requiring prior authorization for radiology, and expanding managed care, as announced earlier by the governor. These changes may help restrain costs but they are only first steps because the GOP is correct: Medicaid in Maine is not sustainable, and the proposed reforms are not enough.

As with his school-district consolidation plan, the governor’s “Dirigo 2.0” sets a direction for reform on an important issue in Maine. Unlike the school bill, this one needs considerably more study on the cost drivers in Maine and the way this state pays for health care services. Cost transparency, a greater understanding of how the state Medicaid budget is divided and more efficient use of the state’s behavioral health dollars are just a few of the topics about which lawmakers should know more.

Gov. Baldacci opened a valuable conversation on health care in Maine yesterday. Fortunately, he had Republicans pre-emptively agreeing with him just the day before.