Monday, August 30, 2004

Dirigo protects the status quo

Maine is attempting to launch a unique partnership with Anthem Blue Cross and Blue Shield. The basic idea of the plan is to subsidize health insurance premiums for workers making up to three times the poverty level, or about $28,000 for an individual. The plan has incentives for business to participate, which means picking up 60 percent of individual premiums for at least 75 percent of employees.

Editorial, Sun Journal, Aug. 29:

The system that ties health insurance to employment is failing.

The Dirigo health reform plan, which formally linked up with Anthem Thursday to create DirigoChoice, is an attempt to save the system that dominates the way Mainers obtain insurance.

Call it "raging incrementalism."

Those are the words Trish Riley, Gov. Baldacci's point person on Dirigo, used to describe DirigoChoice, the state program to help employees who work for small businesses buy insurance coverage.

DirigoChoice does not radically alter the way people will buy insurance in Maine. It relies on a private insurance company, Anthem, to offer a new policy that meets certain state requirements. The state, then, will subsidize the premiums for workers who earn less than three times the poverty level and offer incentives for small businesses that help employees get coverage.

Census figures released Thursday point to the problems with health insurance in this country. The number of people without coverage increased for the third year in a row. Nationally, 45 million people were without health insurance for some part of 2003. In Maine, the number is about 133,000.

While the census figures show that median income fell in Maine, from $39,815 to $37,619, in 2003, cost for health insurance was up six percent for the year, according to Riley. That six percent increase follows years of double-digit increases. In the last five years, health insurance costs are up 77 percent.

The stress is showing in the workplace. Employers are transferring more of the cost of insurance onto workers, while others are dropping coverage altogether. The cost to insure new hires is acting as an anchor on job creation, and pushes businesses to create temporary and part-time jobs that do not come with health care benefits.DirigoChoice is a finger in the health insurance dam. The goal is to restrain rising costs, improve access and maintain high quality. Whether it can accomplish all of these goals remains to be seen. The deck certainly looks stacked against it.The plan would allow an individual to purchase insurance for about $310 a month. That's not a huge savings over insurance already available, but the plan does include no-cost preventative care - uncommon in comparably priced private plans - and subsidies for low-income workers. For example, a person making up to $28,000 a year would be eligible for help with premiums. A family of four with income of $56,500 would also qualify.

The state hopes to insure about 31,000 people in the first year of DirigoChoice, with most of those coming from participating businesses. About 5,000 slots will be open for individuals seeking coverage without sponsorship from their employer.We would have liked for the plan to be cheaper and for it to be open to more people. But "raging incrementalism," by definition, requires going slow, and the state has an obligation to make sure the plan is sustainable before growing it too quickly. Anthem, legitimately, also has to make money on DirigoChoice or the partnership with the state will fail.

There is a general reluctance by many to support a plan that further entangles the government in providing health care coverage. But already the government makes private health insurance possible. Through Medicare and Medicaid, state and federal governments accept responsibility for high-cost populations - senior citizens and the poor.

Dirigo doesn't tear apart the status quo. But even incremental changes are expensive, and Dirigo is no exception. The state costs will be high, and the political costs for the governor could be even higher if the plan is unsuccessful

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