Health Insurers Appeal Maine Universal Health Plan Funding

November 30, 2005

A health insurance industry group this week appealed a state regulatory decision that provides a critical source of funding for Maine’s Dirigo universal health insurance program.

The Maine Association of Health Plans is challenging state Insurance Superintendent Alessandro Iuppa’s ruling last month that Dirigo initiatives resulted in health care savings of nearly $44 million in its first year.

Health insurers are required to make an annual offset payment based on those savings that will help to fund the Dirigo program.

The industry group asks the state Superior Court to overturn the superintendent’s ruling because it says there are no reasonable standards to guide the state in determining measurable cost savings.

The appeal said there is no way to clearly show that nearly $34 million in hospital cost savings are directly attributable to Dirigo health operations. The association also cited what it considers erroneous assumptions leading to the savings calculations.

Spokeswoman Katherine Pelletreau of the Maine Association of Health Plans said companies doing business in Maine “have not yet attained the trickle-down cost savings” cited by the state.

“Everyone wants Dirigo to succeed,” said Pelletreau. But she said the association is appealing to ensure that insurance customers are not overburdened by savings offset payments that exceed realized savings.

Some of Maine’s insurance companies have said they intend to pass the savings offset payments they’re required to make to their customers in the form of higher premiums. Gov. John Baldacci has said he would support legislation to prevent insurers from passing on those costs.

The executive director of the Dirigo Health agency said she was disappointed to learn that the trade group was appealing Iuppa’s ruling.

“I think that from our perspective, the superintendent conducted a full and fair hearing and his decision should be affirmed by the courts,” Karynlee Harrington said.

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