LEWISTON — Mary Ann Michaud is single, receives Social Security and works part time as a personal care assistant, taking care of people with disabilities in their homes.
Until Sept. 1, the 62-year-old Lewiston woman had no health care coverage. “I prayed to God I didn't get sick,” she said.
After two years of closed enrollments, she heard DirigoChoice was opening again.
She applied and got coverage with a subsidy. She is paying the lowest rate, about $143 a month for 80 percent coverage and a $500 deductible.
“Without that, I'd have nothing,” Michaud said. “I don't qualify for MaineCare. I can't afford to have a policy on my own.”
People who have health care coverage from their employers don't realize how much it costs in the individual or non-group market, she said. “It's not nice out there.”
Seven years of Dirigo
Launched seven years ago as a way of getting near-universal health insurance coverage in Maine, Gov. John Baldacci's DirigoChoice became a lightning rod for critics, who said it would cost too much and wouldn't work.
By 2008, it seemed those predictions were accurate. About 12,892 Mainers, a far cry from the original goal of covering 125,000, were getting coverage through the program. Enrollment for those needing subsidies was closed because of a lack of money. And nonsubsidized coverage was expensive.
To many, it seemed the program had failed.
But a limited enrollment is once again open, officials say.
“It's a new day for Dirigo,” said Trish Riley, director of the Governor's Office of Health Policy and Finance.
Now 15,000 people are getting health care coverage. On Monday, the White House Office of Health Reform director will be in Maine to announce that soon 4,500 more Mainers will be allowed into DirigoChoice, the health insurance arm of Dirigo. Other components of Dirigo include programs to improve the quality and efficiency of Maine's health care system.
Another 3,000 part-time, uninsured Maine workers will be given vouchers to buy insurance, thanks to new federal money. That means another 7,500 more uninsured Mainers will get coverage.
That's happening because of more federal money and changes made to the state program last year. The biggest change is reliable funding, Riley said.
Small business owner Richard Cote of Rumford said his family used to get health coverage through his wife's employment, until she lost her job. There went their insurance.
They are covered by DirigoChoice for $1,100 a month for his family of four.
“It is a lot of money,” Cote said. “I don't care where you go, that's what it costs.”
The funding that provides subsidies will total $42 million a year. It comes from a new 2.14 percent fee charged on claims paid by private health insurance companies in Maine. Gone is the controversial and confusing way the program used to be funded.
But the funding continues to be controversial.
“Dirigo has never been popular with the business community,” said Peter Gore of the Maine Chamber of Commerce. The majority of businesses have not chosen to cover their workers with DirigoChoice. Businesses resent the fee charged on insurance claims, which is passed on to ratepayers, Gore said.
“Businesses are already struggling to provide insurance for employees,” he said. “Don't make businesses pay for it. Take that off the books.”
Critics, who tend to be Republicans, say the program should be junked. They include Republican gubernatorial candidate Paul LePage, business people and Terrence Bragdon of the Maine Heritage Policy Center.
“It was well-intentioned, but it's been a costly failure,” Bragdon said.
Dirigo supporters, who tend to be Democrats, say Dirigo should stay. They include doctors, Democratic gubernatorial candidate Libby Mitchell and Consumers for Affordable Health Care.
“We are pleased with it,” said Gordon Smith of the Maine Medical Association. “Whether it covers 100,000 or 10,000 people, it's still covering people who were uninsured or under insured.”
A 63-year-old New Vineyard woman waited two years for DirigoChoice to reopen enrollment, only to find it was too expensive.
For a $2,500 deductible plan, DirigoChoice would cost her $670 a month. The plan would make sense if she had a chronic illness, she said. "I was surprised," she said. "I thought this was great for the people of Maine, that it would be more affordable. I was all set to dump Anthem and jump on Dirigo."
The woman is married and unemployed. She used to work part time for a retail store. She lost her health coverage a few years ago when her husband retired and went on Medicare. She bought a $5,000 annual deductible plan through Anthem. Her premium costs $389 a month, and it's going up.
"If I go to the doctor's, I pay full price," she said. "I do everything I can to stay healthy."
Program vilified, beaten up
Riley, who built and rebuilt Dirigo, said the program has been vilified and misunderstood. It's been “beaten up and beaten up because we did not meet our aspirations because we didn't have the money," she said. "But I'm not making any apologies. We've covered people; people who needed health insurance got health insurance. There are unbelievable stories of people whose lives have been saved and improved because they had affordable coverage.”
She's quick to say the product is still too expensive and doesn't cover enough people.
The reason Dirigo never did what designers intended is because of compromises made to get it passed by Democrats and Republicans, Riley said. The compromises changed what it could do, she said, blaming herself for not explaining that.
“When we opened, we had an iota of the financing,” Riley said. “It was our bad, because we were so busy running it, it never occurred to me that people didn't get it. We never did what we should have done, say, 'This is an important program, but it's not going to be able to do what we thought because it doesn't have the money.'”
Those proposing to eliminate Dirigo don't understand that it wouldn't save any money in the state's general fund, Riley said. People would be kicked off health care, which could raise costs in other programs, or bills would go unpaid.
DirigoChoice is a good option for people who make too much money for MaineCare but don't make enough to afford coverage on the private market, especially people who are not part of an employment group, she said.
Unlike plans that provide catastrophic coverage, what some call asset protection with annual deductibles of $5,000 or more, DirigoChoice allows people to see doctors. All preventive care is 100 percent covered with no co-payments. It also has prescription coverage before deductibles are met. A generic prescription co-pay is about $10 for 30 days.
But coverage isn't cheap. Individual monthly premiums range from $87 to $657 for singles and from $262 to $1,970 for families. The cost depends on whether you get a subsidy and your plan's deductible.
Jeffrey and Ronnie Hanson of Dixfield are self-employed. He runs Hanson's Automotive in Rumford. She sells real estate for ERA Worden in Mexico.
As members of the individual health care market, finding affordable coverage was difficult, she said. On Sept. 1, they enrolled in DirigoChoice.
Last year her husband underwent heart surgery. With their former insurance, they were left with a substantial hospital bill.
They pay about $700 a month for DirigoChoice, about the same as what they paid before, "but we both have excellent coverage now," she said. "Before we had a $5,000 annual deductible. It didn't cover the regular, yearly physicals. It didn't cover mammograms. We could only see a doctor four times a year.”
Coming: national reform
Dirigo also has created cost-containment measures, including voluntary limits on what Maine hospitals spend, and limits profits on insurance companies and how much they can pay their administrators.
Collectively, steps like that have saved Maine $180 million in overall health care costs since 2003, Riley said. Meanwhile, insurance-premium hikes have slowed, she said.
“This is what I'm most happy about,” she said. “From 1999 to 2003, premiums grew 53 percent in Maine compared to 36 percent nationally. Since Dirigo we've reduced our rate of growth to 9 percent while the nation's has gone up 14 percent."
With national health care reform coming, Maine has made a needed investment in the infrastructure, Riley said.
Work is under way to have electronic medical records shared by providers, which can help harness costs by eliminating paperwork and reducing unnecessary medical tests that have already been done.
“We can turn on a dime to implement national health reform,” Riley said. “We do subsidies. We do call centers. We know how to contact insurance companies; we have an 800 number for members, the kind of stuff the national reform envisions.”
Until national health care reform is fully implemented in 2014, “we're the bridge,” she said.