LD 1935 is Unfair, Punitive, Counterproductive and Bad for Maine's Business Community, MEAHP Says

Maine Association of Health Plans urges opposition to LD 1935 at Feb. 14 public hearing in Augusta

AUGUSTA, Maine – The Maine Association of Health Plans (MEAHP) is calling for the Legislature to reject LD 1935, saying the pending bill is unfair, sets a terrible precedent and is bad for Maine businesses and working men and women.

The MEAHP is urging opposition to LD 1935 at a public hearing on Tuesday, February 14, before the Insurance and Financial Services Committee in Augusta. The hearing is scheduled for 2:30 p.m. in Room 208 of the Cross Office Building.

The bill would require insurance companies to continue to pass any savings from the Dirigo Health reform program through to customers, but prohibit insurers from recouping the cost of funding Dirigo.

The state has imposed a $43.7 million assessment, called the ‘savings offset payment’, on private insurers and third-party administrators to finance Dirigo, including its shaky insurance component, DirigoChoice.

If passed, LD 1935 would force insurers to “eat” what is essentially a tax without allowing them to build it into the price of their product, setting a bad precedent for Maine businesses.


The bill also violates a negotiated compromise between businesses, carriers, providers and the Governor’s office in 2003 that permitted both savings and the cost of Dirigo to be passed through in premiums, creating a “wash.”

“We agree that insurance carriers should not profit from any savings that result from Dirigo; that is why any savings are built into premiums and directly benefit premium payers,” said Katherine Pelletreau, executive director of MEAHP, a non-profit trade organization that represents the state’s four major health insurers.

“But at the same time, everyone agreed in the original Dirigo legislation that the savings offset payment could be recouped,” she added. “LD 1935 breaks that promise and must be defeated.”

If passed, Pelletreau said, the financial impact of LD 1935 could prompt insurance carriers to reassess their continuation in the state’s health insurance market

Less competition would result in higher costs and less choice for Maine’s business owners and individual customers.

That is why a host of trade and Chamber associations – and business of all sizes across Maine – are lined up against LD 1935.

Passage of the bill also could set the stage for the state to set up its own insurance company, which could lead to an unlevel competitive playing field, she said.

The MEAHP supports the goals of the Dirigo Health reform effort – to insure the uninsured, to control the growth in health care costs, and to improve the quality of heath care in Maine.

At the same time, she said, the MEAHP recognizes that the funding mechanism for Dirigo is broken, and has called for all parties to work together to fix Dirigo.

LD 1935 is counterproductive to finding a solution and getting Dirigo on track, she said.

“This bill is unnecessary and unfair, and does nothing to address the underlying problem with the funding mechanism for Dirigo,” Pelletreau said. “We stand ready to work with the state to find a solution to the concerns about Dirigo. LD 1935 will only serve to undermine that effort.”

About the Maine Association of Health Plans
The MEAHP is a non-profit trade organization that represents the state’s four major health insurers – Aetna, Inc., Anthem Blue Cross and Blue Shield, CIGNA HealthCare of Maine, Inc. and Harvard Pilgrim Health Care. Collectively, the members provide health insurance coverage for roughly 665,000 Maine people.

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