Dirigo Health board calculates savings

AUGUSTA – The state’s Dirigo Health program will save the Maine health care system $92.7 million in its third year of operation, the Dirigo Health Agency said Tuesday.

The savings calculation is the starting point by which the controversial “savings offset payment,” or SOP, is determined. That payment – which is an assessment made on insurers based on savings created by the Dirigo program – is the current funding mechanism for Dirigo’s insurance subsidies.

The next step in determining the SOP will be a hearing before the Dirigo Health board of directors, scheduled for July 23. Another hearing will follow before the state’s superintendent of insurance, who will set the final SOP figure.

Last year, the Dirigo Health Agency calculated that the Dirigo program resulted in nearly $100 million in savings. The Dirigo board reduced that figure to $41.8 million in determining the savings offset payment, and the insurance superintendent further reduced it to $34.3 million.

“Last year, the Dirigo Health board of directors was pressed to negotiate a savings amount among themselves that was much lower than true savings because of issues they had with the methodology,” said Karynlee Harrington, director of the Dirigo Health Agency. “This year, we have addressed many of the issues used to attack the methodology and have shown that savings are significant.”