Maine Governor Forecasts Increased Competition for Health Plans

By | September 11, 2007

The Baldacci administration is anticipating heightened competition in Maine’s health insurance market as Harvard Pilgrim Health Care becomes the state’s partner in administering Dirigo policies, saying it’s a good deal for consumers.

Gov. John Baldacci also said Friday the Wellesley, Mass., nonprofit’s agreement to administer Dirigo policies will help to advance the program, which he has championed since its inception four years ago.

“They (Harvard Pilgrim) now have a foundation on which to build and I think we recognize it’s competition,” Baldacci said at a news conference in the Blaine House garden a day after the partnership with Harvard Pilgrim, due to take effect Jan. 1, was announced.

“Whatever field it’s in, it’s going to provide better pricing for consumers and strive for customer satisfaction,” Baldacci said. “So we think competition is good. Dirigo was about stimulating and helping to create competition, and where there was little competition we want to bring about more competition … and this relationship I think goes in that direction.”

Appearing with Baldacci were Robert McAfee, the chairman of the Dirigo board of directors, and Robert Downs, Harvard Pilgrim director of development and operations.

The partnership with Harvard Pilgrim was agreed to after Anthem Blue Cross and Blue Shield and Dirigo announced that they could not agree on terms to extend Anthem’s contract to administer the health program beyond this year. Dirigo’s product, which health state officials say will continue without interruption for its 15,000 subscribers, is known as DirigoChoice.

A public health expert said that while Harvard Pilgrim’s move into the Dirigo business is good news for Maine’s health insurance market, it will not bring miracles overnight.

“I don’t know if it’s going to have a significant impact in the short term,” said Andy Coburn, director of the Institute for Health Policy at the Muskie School of Public Service at the University of Southern Maine. Over the longer term it could, he said.

“The more companies that come into the state, the better,” said Coburn. He said it appears Harvard Pilgrim is seeking to increase its profile in Maine, where Anthem has had a dominant share of the health insurance market.

Harvard Pilgrim’s Downs made a brief statement Friday, saying the company is “very pleased and excited to be here and looks forward to working with the state to continue to provide health care coverage for 15,000 Maine citizens.”

“Stay tuned and see what happens,” Downs said.

The governor’s health policy director, Trish Riley, said Harvard Pilgrim’s expanded coverage in Maine roughly doubles its individual and group-policy business in the state “and as such gives them a better foothold in the marketplace.” The nonprofit said it also had about 55,000 fully insured and self-insured members in the state as of July.

Baldacci and other state officials have touted Harvard Pilgrim’s high consumer ratings. House Speaker Glenn Cummings, D-Portland, said it received the top ranking from U.S. News and World Report and the National Committee for Quality Assurance after comparing nearly 260 health plans across the nation.

“Maine launched DirigoChoice because we wanted to put people’s health care before profits,” said Cummings. “Partnering with a nonprofit like Harvard Pilgrim will be more in keeping with Dirigo’s mission and its efforts to reduce the cost of health care.”

Since it was created with bipartisan legislative support in 2003, Dirigo has undergone significant growing pains. The program, designed as a step toward universal health care by making coverage more accessible, has drawn criticism for falling below enrollment expectations.

A key source of funds for the program’s subsidies, assessments to insurers based on savings created by Dirigo, has also been challenged by insurers. Anthem and Harvard Pilgrim consider the state’s latest savings figure excessive.

The Dirigo program has undergone legislative modifications. Earlier this year, lawmakers expanded the Dirigo Health board from five to nine members to add expertise in the complex area of health financing.

The Legislature also authorized Dirigo to self-insure, but officials said there is no immediate plan to move in that direction.

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