May 26, 2019

Hearing on Dirigo changes scheduled Proposal will make agency self-insured

AUGUSTA – Just one day after the governor announced he would introduce legislation to reconfigure the Dirigo Health Agency into a self-insured entity, a proposal to allow that transformation has been attached to an existing bill and a hearing scheduled for next Tuesday to gather public input.

Rep. Mark Bryant, D-Windham, submitted the proposal as an amendment to his bill, LD 1845, which was aimed at achieving the same goal but written in much broader terms. The precisely worded amendment replaces the original bill, which is being considered by the legislative Committee on Insurance and Financial Services.

Baldacci said Wednesday that allowing DirigoChoice to be delivered by the Dirigo Health Agency instead of through a contract with a private insurance company – currently Anthem Blue Cross and Blue Shield of Maine – will eliminate the profit incentive that has made it difficult to price the product affordably. The move will also allow the agency to develop a spectrum of coverage options to make it more appealing to its target market, Maine’s low-income uninsured.

The lengthy amendment introduced on Thursday would allow, but not require, the agency to deliver the DirigoChoice product itself, rather than contracting with a private insurance company. It requires the agency to contract with outside businesses for certain operations, ensuring its continued public-private status.

The measure specifies significant changes to the makeup and responsibilities of the governing board, with a focus on ensuring the agency’s financial structure, operations and soundness. Language in the amendment also addresses the agency’s legal liability, specifying its fiscal separation from other state funds and requiring it to be insured against any lawsuits.

The proposal has the broad support of Democratic lawmakers and consumer representatives, but was met with skepticism by minority Republicans, who say it expands “big government” and undermines Maine’s market-driven insurance industry. Committee members on Thursday raised concerns that policyholders might be unable to bring suit against the quasi-public agency, or might find themselves financially liable if the program fails.

Rep. Kenneth Lindell, R-Frankfort, said after the hearing that it’s important for policyholders and other consumers to understand the changes being proposed. A small-business owner who insures his two employees through DirigoChoice, Lindell said he hopes Tuesday’s public hearing will be well attended, not only by lobbyists and politicians but also by members of the public.

The hearing will begin at 1 p.m. Tuesday, March 21, in Room 427 of the State House.

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