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For Immediate Release
March 9, 2006

Contact:
Katherine Pelletreau, Executive Director, MEAHP 829-5696
Mary Mayhew, MHA 622-4794
E-mail: meahp@maine.rr.com

Kristine Ossenfort, Maine State Chamber of Commerce 623-4568 x21

Web Site: http://www.meahp.com

Coalition Representing Maine Businesses, Hospitals and Insurers Proposes Changes to Dirigo

Proposal would ensure long-term viability of insurance program

AUGUSTA, Maine – Emphasizing that they continue to support the goals of the Dirigo Health Reform Legislation of 2003, the Maine State Chamber of Commerce, the Maine Hospital Association and the Maine Association of Health Plans has released a proposal to ensure the long-term viability of the Dirigo Health Program.

“Our three organizations have formed this partnership because of our shared commitment to ensure that the people of Maine have access to health care coverage and services,” said Dana Connors, President of the Maine State Chamber of Commerce. “As major players in Maine’s business and health care communities, we offer this proposal as a constructive alternative to LD 1935, and as a means of ensuring the long-term viability of the Dirigo Health Program. We want to reduce the number of uninsured and improve the health of Maine citizens. We believe strongly that only through such a collaborative effort can success be achieved.”

The three associations propose to:
  • Replace the flawed and legally challenged savings offset payment with existing and new funding to provide immediate financial stability to Dirigo Health;
  • Create an Independent Commission to focus on improving the Dirigo Health program’s ability to meet the needs of Maine’s uninsured and to identify other public and private initiatives that would further our mutual goals of improving the affordability of health insurance and reducing the number of uninsured in Maine.

“We believe that fundamental changes to both the funding of the Dirigo Health program and to the DirigoChoice product itself would improve the Dirigo Program’s ability to achieve its goals of reduced cost, increased access and improved quality,” said Erin Hoeflinger, Chair of the Maine Association of Health Plans. “We also believe these changes will make the Dirigo Program more viable and sustainable into the future.”

In the short-term, the coalition has identified a one-time funding solution to replace the 2006 Savings Offset Payment with no reduction in DirigoChoice enrollment and no new taxes to carry the program through March of 2007, at which time a sustainable, long-term funding mechanism will be in place.

The proposed Independent Commission would be charged with recommending a more sustainable and reliable approach to funding the Dirigo Health Program. In addition, the Commission would evaluate a number of components, including the structure and benefit design of DirigoChoice and the subsidy program, as well as recommendations on market reforms that could improve the affordability of health insurance for all people.

The proposal is, in part, a response to LD 1935 “An Act to Protect Health Insurance Consumers” which would prohibit health insurance companies from including the cost of the Savings Offset Payment in their premiums. The Savings Offset Payment is the primary means of funding Dirigo and has been the subject of much controversy.

“As noted in our proposal, the Savings Offset Payment is flawed, fraught with uncertainty, and, ultimately, counter productive,” said Steven Michaud, President of the Maine Hospital Association. “It places the burden of financing the program on those employers and individuals who struggle to afford their own health insurance coverage.”

“Dirigo has not reached enough of its target populations—uninsured small businesses and uninsured individuals -- to significantly reduce the cost of bad debt and charity care of hospitals,” Michaud stated, adding “The reductions in bad debt and charity care were the premise behind the original Savings Offset Payment proposal.”

The three groups emphasized that they want to improve DirigoChoice by refocusing the program to better enable it to achieve the goals of reducing cost, increasing access and improving quality.

“The Dirigo Health Program has already made significant progress in the area of quality and we believe that there is much potential to be realized in the program’s cost containment efforts,” said Dana Connors. “We support the goals of this program and stand ready to work with the Legislature, the executive branch, and other stakeholders to improve affordability and expand access to health insurance for uninsured Maine people.”


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Note: the full proposal is available on the following web sites: www.themha.org, www.mainechamber.org, www.meahp.com.



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