“I grew up on Medicaid. I fought all my life to be self-sufficient. With Dirigo I have insurance and so do my workers, it’s vital,” said Joan Donahue of Hummingbird Home Care. Standing with her at a press conference at the State Capitol is Governor John Baldacci. Photo by Ramona du Houx

Summer 2008

Article by Ramona du Houx

Health care, there is nothing so valuable. Good health is really true wealth, but as long as health care is a profit-making business, there will be factions that want to hold up the progress of insuring people in need. There are no big profits in taking care of people who have serious health conditions, so most insurance companies do not insure people with preexisting conditions, and when a patient’s coverage runs out, even if they are still sick and in the hospital, some are shown the door.

Not in Maine.

“Dirigo has saved lives,” said Rep. Jill Conover during a debate in the House of Representatives over approving a law that will provide sustainable funding for the state’s Dirigo Health program. The bill reduces rates for private insurance policy owners by up to 40 percent and provides health insurance for younger citizens.

“The difference for some DirigoChoice members — to go into business, stay in business, or expand their business — has been health care,” said Governor John Baldacci. “People tell me all the time, Governor we need affordable health care. Every single man, women, and child has a right to quality health care. Not just in our state, within our nation. People are yearning for this. We are trying to address health care in an incremental, affordable, responsible manner.”

Dirigo allows working people and businesses healthcare coverage that they couldn’t otherwise afford. In the final days of the 123rd Legislature, hundreds of citizen’s communications via e-mails and phone calls to legislators, and compelling testimony from businesses in a press conference held by the governor ultimately helped to pass this lifesaving legislation.

Paul Hollingsworth co-owns Henry & Marty’s Restaurant in Brunswick. He said that seven of his 12 employees have DirigoChoice coverage. All but one of these employees could not have afforded health insurance prior to the restaurant’s participation in DirigoChoice.

“Two of our employees recently signed up after never having health insurance in their lives; Dirigo is very important to them. It’s important for the people of the state and their businesses who otherwise couldn’t afford health insurance,” said Hollingsworth. “It’s an extremely important program.”

Skip Moskey owns Meadowshire Communications in Limerick. He relocated to Maine a year ago. He said DirigoChoice is an economic driver, as it was one of the critical factors that encouraged him to move back to Maine. Most of his clients are from out of state. He’s bringing business to Maine daily.

“We know a large segment of the Maine economy is made up of business entrepreneurs. Many of us have come here because we want the Maine environment, its quality of life. We bring with us our talents, knowledge, skills, and we really want to thrive and survive. Health insurance is critical for our ability to do that,” said Moskey. “Dirigo is an economic development tool.”

Bill Keleher operates Micro Technologies, Inc. in Richmond. DirigoChoice has put his company at a competitive advantage, he said, as he’s able to provide health insurance to his employees at a reasonable rate. Micro Tech brings in 80 percent of their business from out of state.

“When my former boss went broke I suddenly became responsible for my health care. It was frightening. When I thought of the risk of having no health insurance, it was extremely hard,” said Rebecca Boulanger, one of Keleher’s employees. “I managed to cover my children but at a cost of close to $7,000 in premiums — a year. The same cost of my mortgage. Now, with my new job and having Dirigo I pay half of that. I’m actually saving for my children’s college educations.”

Visibly moved by the testimonies of the business at the Capitol afterwards the governor said, “These stories come right from the heart. That’s why Dirigo is something worth fighting for. It makes a real difference in peoples’ lives.”

LD 2247:

• Provides rate relief to about 40,000 people who don’t have employer-based coverage and who buy individual health policies in the private market.

• Establishes a pilot program of new products for people under 30, designed to meet their needs at a price they can afford. This measure will bring healthy people back into the insurance market to help spread risk and lower costs. Forty-four percent of Maine’s uninsured are under 30 years of age.

• Replaces the controversial Savings Offset Payment (SOP) with a more predictable source of funding and enables DirigoChoice enrollment to reopen to small businesses and the self-employed. Currently, more than 700 small businesses participate in DirigoChoice.

The bill includes a fixed 1.8 percent surcharge on paid claims. Additional funding will come from the Fund for a Healthy Maine, which was created in 1999 to receive Maine’s annual tobacco settlement payments and is dedicated to promoting good health for Maine citizens.

“This is good news for the thousands of Maine people and businesses that rely on Dirigo for quality, affordable health care, and for the tens of thousands of Maine people in the private market who will see their rates go down,” said Hannah Pingree, the bill’s sponsor in Maine’s House of Representatives. “Maine is a national leader in healthcare initiatives that protect consumers and ensure quality coverage, and this bill will keep our state moving forward.”

In Maine, with the leadership of Governor Baldacci, the Dirigo Health Reform Act was passed in 2003. Since then DirigoChoice emerged as the program’s insurance arm and will gladly take people with preexisting conditions. Almost immediately after Dirigo Health’s creation, a nonprofit Republican think tank, the Maine Heritage Policy Center, was created to stop its progress. Establishing a program that makes healthcare accessible to working people and those who can’t afford insurance became a political battlefield. But that never deterred the governor.

“Maine has been a leader in providing quality healthcare coverage,” said Baldacci. “When we began working on Dirigo Health Reform in 2003, Maine was the first state in the nation to make achieving universal coverage a goal, and today states across the country are following our lead. When we began, Maine had the highest rate of uninsured in New England; today we have the lowest.”

Last year DirigoChoice, partnered with Harvard Pilgrim Heath Care. The acclaimed company’s health plan was ranked the nation’s No. 1 in consumer satisfaction by US News & World Report. As a nonprofit health insurer, Harvard Pilgrim shares the Dirigo mission of providing affordable quality health care to all. Today, Harvard Pilgrim Heatlh Care enjoys about a 20 percent market share in the individual market.

“Dirigo was a very reasonable fit for us as a nonprofit insurance provider,” said Charles Baker, president and chief executive officer of Harvard Pilgrim Health Care. “There is a huge potential opportunity for Dirigo, primarily because it serves a market that historically has not been served by anybody. The sole proprietor, individuals, are left out of most insurance plans. This program can be the solution for this particular segment. All the data out there point to the fact that most job growth is due to small businesses, or sole proprietors, but they don’t have options for coverage. Dirigo gives them those options.”

The governor’s original bill called for increasing taxes on cigarettes to pay for the SOP. Funding the SOP with an excise tax on large beer and wine manufacturers and on syrup used to make soft drinks came out of the Legislature, which reasoned that consumers could afford a slight increase on beverages in order to save lives and bring health security to businesses, workers, and families. The increase on a six-pack of beer would only be 30 cents — that’s five cents a beer.

The Heritage Policy Center sprang into action and suddenly Republican College Democrats and business people want to collect enough signatures to put a referendum on the ballot.

The referendum would stop hardworking people from being insured.

“These are business people, working people. They are people who want to be able to provide for themselves and their families,” said the governor. “Working people shouldn’t have to worry about their family’s health insurance coverage. You cannot have a healthy economy if you don’t have healthy people.”

The new law that is being challenged by Republicans will provide Dirigo with $49.6 million next year.

“DirigoChoice has made a difference to employers and their employees, many of whom were unable to afford health insurance before,” said the governor. “This program has saved millions of dollars in Maine’s healthcare system and has literally saved lives. With the passage of this legislation, Mainers will continue to have health coverage, and Dirigo can continue to provide quality healthcare coverage to about 18,000 Mainers who would otherwise have to go without.”

Since its inception three years ago, DirigoChoice has provided insurance for more than 28,000 individuals who were either uninsured or underinsured. The program has saved the Maine healthcare system more than $100 million in that time.

Dirigo has contributed to Maine being the only state in the nation to see its rate of uninsured drop over a five-year period ending in 2006.

The Next Step —

With the Maine Heritage Policy Center push to overturn the new law, people need to know the truth. For the MHPC, fighting Dirigo is their bread and butter. Last year this nonprofit took in over a million dollars. The MHPC is waging a political war without a concern for the 18,000 people who rely on DirigoChoice. Most people don’t mind paying five cents on a beer for health care, especially if the know it is saving a life.

“The legislation stabilizes Dirigo. By late summer or early fall we will be able to open it up to more enrollment,” said Trish Riley, director of the Governor’s Office of Health Policy and Finance.

Now that Dirigo has found a sustainable funding mechanism, Harvard Pilgrim Health Care will work with the state to develop a comprehensive marketing plan directed at small businesses that employ ten or fewer people and the self-employed. These working people make too much to receive state or federal benefits and can’t afford the risk of purchasing insurance without damaging their businesses or the health of their families.

“People who make too much money to qualify for Medicare/Medicaid but are working hard have said, ‘what about us? We are trying to support our families’. Already 90 percent of businesses enrolled in DirgoChoice have 15 or fewer employees. Enrolling more self-employed people and small businesses is the next step,” said Baldacci.

The marketing program will start up in September.

“The goal here is that we need to do something about health care on a national basis. Between now and that happening, we have to go about doing it in a smart way, in Maine,” said the governor. “Maine has succeeded in bucking the trend of a rising national rate in the uninsured, and we were the first state in the nation to make universal insurance a goal. It is vital for our hardworking families and businesses that we continue to reduce healthcare costs and make health insurance more affordable for everyone.”