For Immediate Release
July 25, 2008

Contact:
Katherine Pelletreau
(207) 829-5696
E-mail: meahp@maine.rr.com
Web Site: www.meahp.com

For the fourth year in a row, the Dirigo Health Agency (DHA) board has produced an extremely overstated finding of savings achieved from health plan hospital and physician contract negotiations. This year’s estimate claims savings that are more than four times higher than those awarded by the Superintendent last year, in spite of the fact that DirigoChoice has fewer members this year than last.

The $149.6 million number chosen today by the DHA Board is not credible. It far exceeds the limited savings that the state’s health plans have seen from their negotiations and contracts with providers. In order for savings to be counted in this process, they must achieve savings for the ultimate payor of health insurance premiums – consumers and employers.

A review by the Superintendent of Insurance will form the basis for the 2009 (Year Four) Savings Offset Payment (SOP). Previous year’s SOP hearings have consistently resulted in a lowering of savings estimates. (See chart below) The Superintendent of Insurance’s independent review of this methodology and conclusion will be critical to assuring a credible savings determination supported by the facts. A finding of an inflated amount may actually increase the number of uninsured rather than expand coverage as Dirigo is intended to do. Fewer employers will be able to offer health insurance to their employees because the process taxes the businesses and individuals who have made the considerable effort to pay for health insurance. These consumers should not be required to pay more than their fair share to subsidize Dirigo. It’s not right and it has to stop.

A justice of the Maine Supreme Court recognized that the vague and ambiguous language of the statute under which the Dirigo Health Agency Board made this determination “gives the agency license to assess offset payments according to whatever definition of “cost savings” the agency deems appropriate to meet its financial needs.” Maine Ass’n of Health Plans v. Superintendent of Insurance, 2007 ME 69 (Alexander, J. dissenting). It appears that the SOP process has been reduced to a budget balancing exercise.

The court’s decision, and the history of lowering the SOP each year, represents a clear example of why it is such a conflict of interest to have a board ruling on the funding for its own agency. It is no secret that the program has serious financial problems that have forced the DHA to close enrollment. They have every incentive to pick an inflated number, particularly as they have no other funding options available.

Replacing the SOP process is in the best interest of the Dirigo Health Agency. Each year the DHA has found wildly different amounts of savings and each year these numbers have been reduced at the Superintendent’s review. The process for determining savings is unreliable, expensive, and destabilizing for the Agency because of the difficulty of accurately measuring savings. This funding mechanism is fatally flawed and needs to be scrapped. It is controversial, unpredictable and, ultimately, counterproductive. It places the burden of financing the program on those employers and individuals who struggle to afford their own health insurance coverage. The SOP undermines confidence in and support of the Dirigo program.

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 680,000 Maine people.

NOTE: Wolfe News Wire is an online posting service providing news from noteworthy companies and organizations. We do not collect or share information re: visitors to our site. Members of the media and other visitors are invited and encouraged to share these news items by utilizing the "ShareThis" link or email tool above. Click the side logos to view background info and past news items from a specific company or organization. For more info, please contact Wolfe PR at info@wolfenews.com or (520) 207-9581. Thank you!