Maine Embarks On A Bold And Broad Health Plan

Maine is on its way to becoming the first state to offer its citizens universal health care. Governor John Baldacci, who made health care the top priority in his campaign for office last year, signed the bill creating the plan into law in June.
by | August 2003

Maine is on its way to becoming the first state to offer its citizens universal health care. Governor John Baldacci, who made health care the top priority in his campaign for office last year, signed the bill creating the plan into law in June. It addresses three major health care issues: access to care, cost containment and quality of care. "A lot of states have done one or two of those things at one time," says Trish Riley, head of the state's Office of Health Policy and Finance, "but not all three."

The immediate aim of the plan--known as Dirigo, after the state's motto, Latin for "I lead"--is to provide access to coverage for the state's 180,000 uninsured residents by 2009. A new agency made up of private and public entities will arrange for coverage through private insurers. Small businesses will have to provide up to 60 percent of the cost of insuring their workers, while the state will provide subsidies so that needy individuals and families can pay their share. In addition, Medicaid eligibility will be expanded.

The state is devoting $53 million from a recent federal payment to the states to subsidize the plan during its first year. In subsequent years, the state figures program costs will be largely offset by eliminating unreimbursed medical costs run up by uninsured people.

"One reason I'm confident that this will be sustainable over time," says state Senate Majority Leader Sharon Treat, one of the bill's sponsors, "is that it does not depend entirely on government funding, nor is it entirely dependent on employer contributions."

There is some question--and skepticism--about whether the Dirigo plan is adequately funded or will be supported by the private sector. David Clough, of the Maine chapter of the National Federation of Independent Business, doubts that small businesses will be able to absorb the costs of participation or that the plan, which attempts to define benefits and costs, will be attractive to insurance companies.

Insurance companies will bear some of the fiscal burdens: They will have to provide the state with 4 percent of their premium revenue and have to win state approval for rate increases for group plans.

Other health care players will also be asked to contain costs--but on a voluntary basis. Hospitals, physicians and other providers will be pressured to cap prices and restrict expansions. On the quality front, Dirigo calls for a committee to be set up to establish parameters for quality care, collect and disseminate health care data, and conduct consumer education campaigns.

The new law, which passed with two-thirds support in both legislative chambers, reflects a widespread sense of urgency throughout Maine that something had to be done to address the state's persistent health financing problems. "To some extent, it's an economic development issue," says Kristine Ossenfort of the Maine State Chamber of Commerce. "If employers are struggling to pay health insurance, they may not be able to hire people or offer them higher wages."