Maine Governor Wants Health Coverage to be Mandatory

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A broad package of health insurance reforms that builds upon Dirigo and would lead to mandatory coverage for businesses and individuals was unveiled Wednesday by Maine Gov. John Baldacci.

Baldacci’s plan, designed to move Maine closer to universal health care, also includes market reforms such as a state reinsurance plan, requiring insurers to give discounts for nonsmokers and worksite wellness programs, and more rigorous reviews before rate increases are allowed.

In the MaineCare program, Baldacci proposes a 50 percent increase in prescription copays, reducing administrative costs and recovery of more money from insurers, workers’ compensation and Department of Veterans Affairs. The plan also sees a modest increase of roughly 1,000 people in the Dirigo Health program to 14,500 over the next year or so.

The Democratic governor said that once those and other steps are in place, Maine would institute a “pay or play” program mandating coverage for employers by July 2008 and individuals by January 2009.

Baldacci said initial steps toward universal health care were taken when the Dirigo Health program was established in 2003, putting Maine in the national spotlight and helping it to address the swelling ranks of uninsured.

“Maine has been able to turn back the tide,” Baldacci said. But he said more work needs to be done to reduce costs, enhance quality of care and create a more favorable market for insurers.

A major component of what he described as “a responsible package” is creation of a state reinsurance program, which would relieve private insurers of costs related to their highest-risk customers.

The governor also wants to go after those who can afford insurance but choose to go without, which effectively passes the cost to others who are insured. It calls for a study to come with rules for implementing a “pay or play” insurance mandate, which would apply to businesses and individuals whose incomes are 400 percent of the federal poverty limit.

It also continues but modifies the savings offset payments made by health insurance carriers to help finance the Dirigo program. The SOPs have been unpopular with the insurance industry. Baldacci’s plan incorporates legislation to make Dirigo self-insure rather than have a private company market and design the program.

The governor’s proposal, whose fine points were still being drafted Wednesday, was met with mixed reviews.

The leader of a consumers’ group said the proposed reinsurance plan amounts to a high-risk pool, something the Republicans advocated long ago as an alternative to Dirigo.

Joseph Ditre of Consumers for Affordable Health Care said the reinsurance plan creates a system in which taxpayers subsidize insurers. He said Baldacci’s proposal is “really not a plan but a grab bag of proposals.”

A Republican leader applauded Baldacci for including reinsurance and higher MaineCare copays, calling them “a step in the right direction.” But House Minority Leader Josh Tardy of Newport also said he has reservations about mandated insurance for individuals and businesses.

The conservative think tank Maine Heritage Policy Center was troubled by what it believes are tens of millions of dollars in new taxes woven into the governor’s proposal.

David Clough of the National Federation of Independent Business said Baldacci’s plan gives the insurance industry some of what it wants and some of what consumer advocates want, but “overall it’s hard to say this will improve choices and affordability for small business.”

“This has to be answered with facts, not rhetoric,” Clough said.