Maine Health Insurers File Second Suit to Block Dirigo Fees

December 23, 2005

A dispute between the health insurance industry and Maine’s Dirigo Health program continues to escalate, as a trade group representing four large health insurers files a second lawsuit against the 2-year-old program.

The Maine Association of Health Plans is seeking to block orders that insurers pay nearly $44 million to expand the state-subsidized health insurance program. The suit, filed in Cumberland County Superior Court, challenges a formula used by the Dirigo board to arrive at the fees imposed on the insurers. It calls the fees “arbitrary and capricious.”

The state Insurance Bureau contends that the fees offset savings in the health care system that were achieved through the Dirigo initiative. The fees are set at 2.4 percent of private insurers’ paid claims.

The health insurance industry group also challenged the fees in a lawsuit it filed late last month against state Insurance Superintendent Alessandro Iuppa. The Maine State Chamber of Commerce and a health plan representing auto dealers and bankers made the same arguments in separate suits.

Dirigo was created to expand health coverage to Mainers who cannot afford it or are underinsured. About 7,000 Mainers are now insured through DirigoChoice and another 3,000 people are on a waiting list.

A state official said it is difficult to understand the insurers’ position because the fees were arrived at through a lengthy hearing last month in which the insurance companies participated.

Trish Riley of the Governor’s Office of Health Policy and Finance also said insurance companies that pass along the cost to consumers will be violating an agreement the insurers and the state reached in 2003.

Was this article valuable?

Here are more articles you may enjoy.