June 25, 2019


Do you want to reject the parts of a new law that change the method of funding Maine’s Dirigo Health Program through charging health insurance companies a fixed fee on paid claims and adding taxes to malt liquor, wine and soft drinks?

Adding a few pennies to the cost of a beer or soda is not going to cause hardship among Maine residents or wreck the Maine economy. Eliminating health care coverage for thousands of Maine residents will.

There are problems with the state’s Dirigo Health program, but rejecting this tax will not fix them. Instead it will ensure that the program meant to expand insurance coverage and improve health care by maximizing savings and improving quality remains hobbled. Critics are right that Dirigo has not reached the potential promised by its backers, but this is because those critics have ensured that Dirigo is financially constrained and unable to expand.

Rejecting Question 1 would give Dirigo a chance to succeed.

In the final hours of the last legislative session, lawmakers passed a new funding mechanism for Dirigo, consisting of a new tax on soda, increased taxes on beer and wine and a surcharge on health insurance claims. Those seeking to repeal the tax are right that there should have been more discussion of this funding mechanism, although it did come from a blue ribbon commission set up to find new ways to pay for Dirigo.

A study that predicts the beverage taxes will cost Maine jobs and revenue is undermined by the fact, included in the analysis, that companies often raise their prices more than the amount of the tax increase.

Those seeking to repeal the tax have received more than $1.5 million in financial support, most of it from soda companies, which appear worried that Maine will set a precedent by tying soda to health through the new tax.

The taxes replace the controversial savings offset payment. The SOP was meant to be a calculation of the health care savings resulting from Dirigo reforms, with the savings to be used to extend health care policies to those without insurance. The superintendent of insurance recently calculated the SOP to be $48.7 million last year.

The use of the SOP and the annual calculation of savings were challenged in court by the insurance industry. Although it was upheld, calculating and defending the SOP was costing the state between $3 million and $5 million a year.

In abandoning the SOP, lawmakers have weakened the state’s efforts to rein in health care costs. This is unfortunate, but understandable given the hostility toward the SOP.

Going back to the SOP, which is what will happen if Question 1 passes, will ensure more years of litigation, shortchanging the small businesses and individuals who benefit from Dirigo.

A vote against Question 1 will give an innovative health care reform system a chance to succeed.

Have feedback? Want to know more? Send us ideas for follow-up stories.

comments for this post are closed

You may also like