Testimony Regarding LD 1005 and Regarding LD 1264 (Dirigo Health Funding): An Act to Continue Access to Dirigo Choice Health Insurance by Reducing Administrative Costs and Replacing the Savings Offset Payment and An Act To Stabilize Funding and Enable DirigoChoice to Reach More Uninsured

From the beginning, the most contentious issue related to the Dirigo Health Reforms was how to fund them. Experience with the Savings Offset Payment and the many lawsuits that have followed suggests that Dirigo’s supporters and opponents likely would agree that the SOP doesn’t even qualify as the least, worst option. Indeed, the intervenor briefs for each year’s filings read like a dissertation on statistical analysis and quickly reveal the complexities and inefficiencies of the current approach.

To the legislature’s credit, you tried to address this issue but ran into the juggernaut of narrowly defined self-interests that is the beverage industry. Allegedly, this group provided nearly $4 million to support the campaign in opposition to the proposed tax on soda, beer, and wine. Putting this in the context of Maine campaign spending, that’s three times the amount spent by the winning candidate in Maine’s last gubernatorial election.

LD 1005 and LD 1264 revisit this issue and, at the very least, provide some predictability and stability in the future financing of DirigoChoice, the insurance program for small businesses, self-employed, and individuals put forward as part of the Dirigo Health Reforms. In 2007, 61.5% of Maine citizens under the age of 65 receive health insurance through their employer and 5.6% obtain it on the individual market. While DirigoChoice has the potential to provide insurance access in these critical markets, financing issues have forced the program to close enrollment.

MECEP believes that access to health insurance and health care is an economic imperative. Insufficient and unaffordable access undermines productivity and competitiveness in the global marketplace. While these bills alone cannot address the broader ailments of our state and national health care system – out of control costs, insufficient information and access, and the need to create a structure that rewards prevention and quality outcomes – we believe that LD 1005 and LD 1264 allow us to get DirigoChoice back on track and continue efforts to insure that Maine businesses and individuals have the tools needed to succeed in today’s global economy. 

Garrett Martin, Economic Policy Analyst, testifying before the Joint Committee on Insurance and Financial Services in support of LD 1005 and LD 1264.