Maine's Blue Ribbon Commission: Reinventing Financing for the Dirigo Health Insurance Program

On May 24, 2006, Maine Governor John Baldacci signed an executive order establishing the Blue Ribbon Commission on Dirigo Health in order to "make recommendations with respect to long-term funding and cost containment methods to continue the efforts of Dirigo Health in increasing the affordability, accessibility, and quality of health care" for the state's citizens. [1] The commission was created in part in response to a lawsuit brought against the state claiming that, among other things, the assessment on insurance companies that is used to collect the "savings offset payments" that partially fund the Dirigo coverage program was an illegal tax. In August, the superior court ruled in favor of Dirigo Health on all of the issues raised in the lawsuit and held that the assessment was not a tax—a victory for the program. This decision has been appealed to the Maine Supreme Court and oral arguments have been scheduled for February 13, 2007.

The 20-member Blue Ribbon Commission was charged with making recommendations to the governor about how the program should be funded. Several options were endorsed at the group's final 2006 meeting, including increasing the tax on tobacco products, establishing a snack tax and a tax on soft drinks and syrups, and a beer and wine tax. In addition, they endorsed the continued capture and redirection of bad debt and charity care funding. [2] The savings offset payment remains the law until such time as the Legislature changes it. Trish Riley, director of the Governor's Office of Health Policy and Finance, said, "We are encouraged that the Blue Ribbon Commission endorsed Dirigo Health, provided recommendations for ongoing funding and moved Maine toward employer and individual mandates and other market reforms."

The commission also examined issues relating to cost containment, improving the Dirigo program, and Maine's insurance market. Among its recommendations were: support, in concept, for an employer mandate and a mandate for individuals above 400 percent of the FPL to have coverage; market reforms; and allowing the Dirigo Health Agency the option to self insure. The commission's final meeting was held on December 19. The commission is currently working through the written comments it has received regarding the report, and hopes to submit it to the Governor's office by the end of January.

Notes
[1] Maine Office of the Governor Executive Order No. 14 FY06/07, May 24, 2006.
[2] Final Report of the Blue Ribbon Commission on Dirigo Health, December 14, 2006 draft.