Maine Judge Upholds State on Dirigo Savings; Appeal Likely

By | August 9, 2006

A Superior Court judge has rejected an appeal of last fall’s decision by Insurance Superintendent Alessandro Iuppa that Maine’s Dirigo Health Agency initiatives produced savings of $44 million in the program’s first year.

The ruling is a victory for the Baldacci administration and comes on the appeal brought by the Maine Association of Health Plans and two other business organizations.

Justice Ronald Cole said the petitioners’ main challenges focused on the methodology used by the Dirigo board of directors during the course of the regulatory proceeding and on the reasonableness of Iuppa’s decision.

Cole said the court would “not second-guess the agency on issues within its area of expertise,” and that the superintendent’s decision was “supported by substantial evidence” in the case record.

“This ruling is a victory for all Maine people who seek access to quality and affordable health care,” Gov. John Baldacci said in a statement.

The case was brought by the Maine Association of Health Plans, the Maine Automobile Dealers, and the Maine State Chamber of Commerce.

“We’ll appeal the decision. I think everyone understood this case was headed to the law court from the outset,” said Bruce Gerrity, a lawyer for the automobile dealers.

Officials with the Maine Association of Health Plans, Katherine Pelletreau, and the state chamber of commerce, Kristine Ossenfort, also said a further legal appeal was possible.

The Dirigo Health Agency was established to promote affordable health care coverage, and a key part of the program is its subsidies for low-income individuals and business employees.

Subsidies are funded in part from savings offset payments made by health insurance carriers.

“I have believed all along that the Superior Court would decide in Dirigo’s favor. That is why, despite this case brought against Dirigo, I have resolved to move forward and continue to work to expand access to quality and affordable health care for all Maine people,” Baldacci said.

“The Blue Ribbon Commission on Dirigo Health that I established will meet for the first time this Wednesday to examine and propose long-term strategies to get us to the goal of universal insurance, using the model that we’ve established under Dirigo Health,” Baldacci said.

Iuppa said last month that savings in the state’s health care system resulting from the Dirigo Health program last year amounted to $34.3 million.

Dirigo Health, which is designed to gradually provide access to health coverage for 130,000 uninsured and underinsured Mainers, as of June was providing health care to more than 15,400 Mainers, including 2,300 small businesses, according to the governor.

“With over 15,000 Maine people covered by Dirigo Health and $78 million in savings, Dirigo Health continues to move forward and make strides for all Mainers,” Baldacci said Monday. “I look forward to the work of my Blue Ribbon Commission to help ensure we will continue down the path of expanded access to coverage and millions more in savings.”

Championed by Baldacci, the Dirigo Health Reform Act was signed into law in June 2003.

According to Trish Riley, director of the Governors Office for Health Policy and Finance, the savings figure for the so-called first year of the program does not derive from a uniform base year but stems from the 2004-2005 period.

Supporters of the Dirigo health program took heart from the court ruling.

The decision affirms that savings are “real” and that “Dirigo Health is here to stay,” said state Senate Majority Leader Michael Brennan, D-Portland.

“Justice Coles decision means that the Dirigo Health program can move forward. … Now, these savings can be put back into the health care system to cover thousands of uninsured and underinsured individuals and small businesses in Maine,” Joe Ditre, executive director of Consumers for Affordable Health Care, said in a statement.

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