Maine Dirigo Found to Save $44 Million; Governor Claims Victory

By | November 1, 2005

Maine Gov. John Baldacci has applauded a ruling by Maine’s top insurance regulator that found $43.7 million in first-year savings from Dirigo Health, a state-subsidized program designed to provide health coverage to Maine’s uninsured.

Backers of Dirigo Health said the ruling by Insurance Superintendent Alessandro Iuppa means that the program will have enough money to operate into 2006.

Iuppa’s decision followed two days of contentious public hearings earlier in the week to gauge how much savings the program has generated in Maine’s health care system.

The ruling was seen as vital to Dirigo’s future. That’s because insurers are required to make an annual savings offset payment to fund the program. The payment is based on the premise that insurers will reap the benefits of voluntary spending caps by hospitals and other cost-control efforts associated with Dirigo Health.

The Baldacci administration had estimated the program’s savings at nearly $137 million dollars, or more than three times the amount determined by Iuppa. Nonetheless, the governor said the ruling was a victory.

“The Dirigo Health savings have been put under the microscope of the state’s leading law firms and actuaries,” Baldacci said. “They’ve been examined by experts across the country and put through arduous scrutiny. There is no doubt at all that the savings are real.”

Insurers had questioned how the Baldacci administration measured its purported savings. Questions were raised during the hearings on whether data was manipulated to make Dirigo Health appear more broad-reaching than it was.

Anthem Blue Cross and Blue Shield of Maine, an intervenor in the hearings, said it wanted to study Iuppa’s decision before making further comment.

“We have always believed that there have been savings generated from the initial implementation of the Dirigo Health initiative and the superintendent’s decision confirmed that there has been savings,” said Mark Ishkanian, a spokesman for Anthem, which has partnered with the state in providing its DirigoChoice product to 8,500 Maine residents.

It was unclear if any of the intervenors in the hearing planned to go to court to appeal the superintendent’s ruling.

The amount of the savings offset payment, to be assessed starting in January, will be determined by the board of directors of the Dirigo Health agency. The fee cannot surpass 4 percent of paid health claims. Dr. Robert McAfee, the board chairman, indicated that the assessment may approach the maximum allowed.

“I suspect that we’ll come quite close to the full amount in order to insure as many peple as we can,” McAfee said. “I anticipate the need (for the program) will be greater, not less.”

Baldacci said he hopes insurers refrain from passing the cost of the offset payments onto customers.

“They must deliver the savings to the health care consumer, so everyone benefits,” the governor said.

Copyright 2005. Assoctaed Press. All rights reserved.

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