March 28, 2024
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Baldacci signs health plan into law

AUGUSTA – In a garden party ceremony at the Blaine House on Wednesday, Gov. John Baldacci signed into law his landmark health care reform legislation. The mood was celebratory, with much backslapping and handshaking.

In his brief prepared remarks, Baldacci recalled his campaign pledge to reform Maine’s health care system. “In signing this bill today, our promise becomes a reality,” he said.

The event was attended by most major and minor players who have participated in the drafting and fine-tuning of the plan, including representatives from hospitals and other health provider groups, insurance companies, consumer organizations, business and labor groups, as well as lawmakers and administration officials.

Baldacci paid tribute to “all the stakeholders around the table,” especially the small team that developed the Dirigo Health Plan, headed by Trish Riley, the director of his Office of Health Care Policy and Finance.

The governor also credited the 15-member bipartisan Joint Select Committee on Health Care Reform that saw the bill through its many contentious revisions and amendments as closed-door negotiating took place with special interest groups. The committee, co-chaired by Sen. Michael Brennan, D-Portland, and Rep. Thomas Kane, D-Saco, eventually voted the bill out with a unanimous “ought to pass” recommendation.

That unanimity, followed by strong bipartisan support in both the House and the Senate last week, represents the “spirit of collaboration” that will continue to be needed as the new law is implemented, said Baldacci.

Because an emergency preamble was stripped off the Dirigo bill in order to render unnecessary two-thirds majority approval, its provisions cannot be implemented for 90 days. When the bill does go into effect, its impact will be felt in several arenas at once.

Dirigo Health

The plan’s centerpiece, a new quasi-state agency called Dirigo Health, will be formed, overseen by an eight-member board. Five voting members will be appointed by the governor and confirmed by the Legislature. Three nonvoting members will include designated members of the Baldacci administration.

Through Dirigo Health, commercial insurance companies will offer comprehensive, subsidized health care coverage. Mental health coverage is mandated, but dental care and eyeglasses will not be covered.

The details and cost of the benefit package will be negotiated between insurance companies and the Dirigo Health board.

Insurance through Dirigo will be available in July 2004, offered initially to uninsured individuals, the self-employed and employees of businesses or municipalities with 50 or fewer workers.

Employers will be asked to pay up to 55 percent of workers’ premiums, and workers will be responsible for the balance. Workers with incomes of up to 300 percent of the federal poverty limit – about $55,000 for a family of four – will qualify on a sliding scale for assistance in paying their portion.

Officials anticipate about 31,000 enrollees in the first year, with a goal of providing coverage to all of Maine’s uninsured and underinsured residents within five years.

Participation in Dirigo Health is voluntary. Employers may participate if 75 percent of their employees who work 20 or more hours per week want the coverage.

First-year subsidies for insurance offered through Dirigo Health will be provided through $53 million in federal dollars recently made available to states for health care funding.

In subsequent years, subsidies will be funded by payments to the agency from insurance companies. The amount of insurance company payments will vary, based on savings to the health care system that result from more people having coverage, but will not exceed 4 percent of premium revenues.

Eligibility for MaineCare, Maine’s Medicaid program, also will be expanded to include about 7,000 new adult enrollees. MaineCare-eligible workers may choose between standard MaineCare benefits or the plan offered through Dirigo. The Dirigo plan will pay providers at a rate that is comparable to standard “market” prices, as contrasted to Medicaid’s notoriously low payment schedule.

If, after three years, commercial insurers elect not to provide a Dirigo package, the Dirigo board is directed to request legislative approval to start a state-operated nonprofit insurance company of its own.

Cost containment

The plan sets into law many cost-containment measures and financial reporting systems.

Insurance companies will have to seek approval for rate increases in all small- and large-group markets. Hospitals and doctor’s offices will compete for approval to make major expansions in facilities or services, after a one-year moratorium already in place on such projects expires. The superintendent of insurance will be required to conduct a study of medical malpractice cases in Maine.

In an effort to boost consumer interest and increase the availability of information, hospitals will have to maintain a price list of available services and procedures and provide that list to patients on request. Doctors and other private-practice providers will be required to notify patients in writing of their charges.

Insurance companies, hospitals, doctors and other providers have agreed to set a voluntary limit on costs and profits for one year. Early versions of the bill threatened state financial regulations if such caps weren’t met, but intense negotiating removed this incentive, replacing it with “good faith effort” language.

Quality Improvement

The Maine Quality Forum will be a 17-member body representing a wide range of interests and experience, including providers, employers, consumers, business and labor groups. The forum is charged with establishing parameters for quality care, collecting and disseminating health care data, conducting consumer education campaigns and other tasks.

Its broadest charge is to make recommendations for a statewide health care system that seeks to coordinate and distribute a range of medical services throughout the state and to manage health care growth at a sustainable level. The governor is required to issue a state health plan and a state health budget every two years that reflects progress toward these goals.

The bill also calls for a study of Maine’s small hospitals and an assessment of the health care needs of veterans.


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