Dirigo is not helping the uninsured in the numbers once projected.

Dirigo Choice, the insurance component of the state-sponsored Dirigo Health program, is sputtering and in need of an overhaul.

One of the primary goals of Dirigo Health is to insure the previously uninsured by providing Maine small businesses and individuals with an affordable, high-quality option for health coverage.

A laudable aim, to be sure, and one that we support. But Dirigo Choice is failing far short.

Enrollment projections are way off, small business owners are staying away in droves, and the vast majority of those who have signed up already had private health insurance.

Dirigo Choice was created to cover uninsured Mainers. State officials originally claimed that Dirigo would provide health insurance to 130,000 uninsured Mainers in five years. Officials also projected that 57,000 residents would be enrolled after the first year. Those projections were later modified to 31,000 first-year enrollees, then to 21,000 signed up by the end of 2006.

In truth, with the program’s first year now in the books, the total number enrolled is about 9,000 – about 70 percent below projections – with fewer than 4,000 of those being Mainers who were previously uninsured. And Dirigo Choice has not been completely forthcoming with its numbers; the published enrollment amount includes more than 1,200 who enrolled and then dropped out in the first year.

Dirigo is not helping the uninsured in the numbers once projected. But it is spending a lot of money trying.

The Dirigo Health Agency already has spent more than $30 million to launch the program and provide subsidies in the first year. Now, the state is seeking $43.7 million in “recovered” health system savings, called the Savings Offset Payment, from private insurance companies and third-party administrators to fund the ailing program for 2006.

The numbers certainly paint a bleak picture.

Dirigo Choice is falling so far short because its product offerings are very limited, the benefits are not flexible and the products cost employers no less than those currently available from other carriers.

Small businesses have been reluctant to buy Dirigo Choice coverage for their employees because, even with the subsidies, the program still costs too much. The difference in premium costs between private insurers and Dirigo Choice is minimal.

And for small businesses that do offer coverage to employees, Dirigo Choice just isn’t that appealing. The health plan offers only two choices, one with a $1,250 deductible and the other at $1,750, while private carriers offer far more extensive and flexible options.

Still, privately insured individuals and small businesses have been the best customers. But since most dropped their private coverage for Dirigo Choice, the program is exhausting its budget while doing little to help the previously uninsured.

As a result, Dirigo’s expenses remain very high, and the state is trying to impose a new $43.7 million business tax to keep it afloat.

Clearly, Dirigo Choice is not measuring up. The domino effect of its failings are at the root of the ongoing controversy over funding that threatens to doom the entire Dirigo Health reform effort.

Dirigo Choice is not attracting customers, so savings are not getting generated as projected. And to the extent that savings to the private market are less than the Savings Offset Payment, the difference will get passed on to the many thousands of working Mainers and their employers who purchase health insurance outside the Dirigo Choice program.

So this burden falls squarely on the shoulders of Maine’s business community and working men and women.

Additionally, since the $43.7 million in purported savings to Maine residents is to be collected only from the 55 percent or so of Mainers who are privately insured, the state is asking roughly half of Maine’s population to pay for 100 percent of the savings.

That’s not right. As a result, the state’s actions have triggered legal battles and led to questionable new legislation that is creating even more acrimony and ill will.

The Maine Association of Health Plans (MEAHP), a nonprofit trade organization that represents the state’s four major health insurers, supports the goals of the state-sponsored Dirigo Health program – to insure the uninsured, contain health care costs and improve the quality of care.

But we recognize that the effort will fail without an overhaul of Dirigo Choice.

We understand the issues and want to help find solutions. The benefit plan needs to be more competitive with existing products. The enrollment process can be streamlined, and the focus should be shifted to target the uninsured. Also, the program needs a credible, reliable funding mechanism that is more broad-based and fair.

Working together, we can fix Dirigo Choice.

Katherine Pelletreau is the executive director of the Maine Association of Health Plans, a nonprofit trade organization that represents the state’s four major health insurers.

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