By Kathryn Skelton,Staff Writer
Why should you care?

1) You’re paying for it;

2) You may need it;

3) You should know the facts.

The revolutionary plan to cover Maine’s uninsured has helped 13,000 people. Or 9,200. Or more like 4,000, depending how you count.

Dirigo, thy name is confusion.

What began as a widely lauded approach to rescue Maine’s uninsured, lower medical costs and boost everyone’s health has spun into a divisive, questionably successful enterprise that’s become harder for outsiders to ignore or understand.

And it’s only going to get worse.

Now, you’re probably paying for it, directly.

The state’s largest insurer has been quite public about tucking the cost of the program into this year’s health insurance bills. Others insurers haven’t been so vocal, but they’re doing it too, and they’re all challenging that cost in court.

Meanwhile, the governor’s challenging the insurance industry to absorb the cost, based on savings they’re getting on the other end. And the whole thing is, well, challenging.

Expect it to be the hot topic as the race for governor kicks into high gear in coming months and declarations on both sides of the issue – “It’s working!” “It’s not!” – rev up.

A breakdown of Dirigo highlights, figures and facts, in plain language.

So, what is DirigoChoice?

It’s the name of the health insurance tied to the Dirigo program, signed into law back in 2003. Sold by Anthem Blue Cross and Blue Shield, it’s designed to operate on a sliding subsidy scale and intended to make coverage more affordable for Mainers.

DirigoChoice covers preventive care visits and lab work 100 percent, plus gives a $100 check-in-the-mail incentive just for picking and visiting a primary care physician.

The premise: Get more people insured, people get healthier – they go to the doctor regularly and avoid more expensive trips to the ER – and costs go down for everybody.

Mainers spend a lot of money on health care, period; more of their income, per capita, than people in 45 other states.

What’s enrollment been like?

In 2005, the first full year of DirigoChoice, 8,676 people signed up. (Another 4,340 joined via a Medicaid expansion written into the original Dirigo bill, for parents of kids on MaineCare. This is where some of the math gets tricky.)

The program offered a gradual rollout, first to businesses with fewer than 50 workers, then to individuals who’re unemployed, retired or working part-time.

Not everyone who signed up liked it, kept it or stayed with the coverage: December closed with 7,400 DirigoChoice enrollees.

Officials had placed early coverage estimates at 31,000 people at the end of Year One. It clearly didn’t hit initial targets, but just how badly it missed depends on your support of the program.

Trish Riley, who leads the Governor’s Office of Health Policy and Finance, says bad publicity has had a “chilling effect on enrollment.”

As of Feb. 1, enrollee count was up to 9,270 plus 4,545 MaineCare parents.

Who’s being helped?

So far, lots of people who already had insurance.

In the first nine months, between 55 and 60 percent of the people signing up for DirigoChoice had other coverage of some sort.

Nearly half of early enrollees told Muskie School of Public Service researchers that their previous insurance was cheaper than DirigoChoice, but they made the switch anyway. One reason: Forty percent said their old plan had a high-deductible, at least $2,500 out-of-pocket before coverage kicked in.

(Interestingly, lots of those people had Anthem.)

DirigoChoice rates are based on income. Most people who’ve enrolled so far earn less than 200 percent of the poverty level, giving them at least a 60 percent premium discount.

Sample rates for a family of three getting DirigoChoice through work, with discounts included:

• If household income is $30,000, the employer pays $187 toward family coverage, the family pays a $300 monthly premium and the family deductible is $1,600.

• If household income is $45,000, the employer still pays $187, the family’s monthly premium is $600 and the deductible $2,900.

Now say that all six times fast.

What was Maine’s insurance scene before DirigoChoice?

Maine already had one of the lowest rates of uninsured in the country: 10.6 percent or roughly 140,000 people, according to the U.S. Census.

Part of the reason: 18 percent of the state is on Medicaid, one of the highest rates in the country, as counted by the Kaiser Foundation.

Making up the remaining 71 percent: The 700,000 or so people with private insurance.

To cover the bad debt and charity care of others, those insured people had an average $275 built into premium costs for an individual policy in 2005, Riley said.

Show me the money: How much has it cost and where’s it going?

Back in September 2003, the state set aside $53 million to start DirigoChoice. The money’s gone to subsidies, administration, etc., and, as of last month, there’s still $29 million left.

Sample month: In December, it cost $2.5 million to insure 7,400 people (about $338 a person). Employers and enrollees chipped in $1.4 million, state money covered the rest, according to figures from the Dirigo Health Agency.

What about when the start up money runs out? Keep reading.

So what’s all the controversy about?

The state set up DirigoChoice to capture health-care savings – money not spent because the program existed – and funnel that back into the system.

In November, the insurance superintendent determined that $43.7 million was saved the first year. Most of that money came from the governor asking hospitals to limit their spending increases. They did.

So the Dirigo board asked insurance companies and self-insured businesses – which were theoretically collecting the same amount of premiums from customers but paying out millions less for health care – to come up with that same dollar amount and give it to the state by paying a bit each month, starting in April.

It’s called the savings offset payment.

Anthem, which has about half the state’s private market, has been the most prominent in saying that it’s passed the payment fees along to customers by adding roughly 2 percent to the cost of premiums this year. Harvard Pilgrim and CIGNA have done the same.

The other big one – Aetna – hasn’t been so public about how it’s handled it. Attempts to reach a spokesperson were unsuccessful.

That increase is big bucks to some businesses, reportedly $500,000 for L.L.Bean alone.

Can insurance companies pass the buck?

They can.

A pass-through is legal: This year’s premiums have already been set, and some people have argued that’s how it’s supposed to work. So pass it on they have.

This spring there’s a bill in the Legislature that would forbid companies from doing that.

In addition, the Maine Association of Health Plans, the state chamber and others aren’t buying the $43.7 million savings figure. They say it’s far less. It’s being challenged in Cumberland County Superior Court in early spring.

Gov. John Baldacci’s firm stance: You saved it, you pay it back. Don’t make customers pay it back by raising rates even more.

If insurance companies – and, in turn, customers – weren’t faced with the savings offset payment this year, DirigoChoice may not have been judged so swiftly by detractors.

“Where some people were saying, ‘Eh, what do I care?’ Now they’re saying, ‘Oh no, it may affect me,'” said Tarren Bragdon of the Maine Heritage Policy Center. “I think you’re seeing renewed interest from people who were ambivalent about it.”

This particular debate – What are the real savings? What will become of the savings offset payment? – will only get more heated when the Dirigo Board releases 2007 figures in April.

Expect more contention.

How’s Anthem handled DirigoChoice?

“It hasn’t been as aggressive as we’d like in marketing and product design,” Riley said.

There have also been complaints about Anthem-approved agents steering potential customers toward other plans, or bashing DirigoChoice altogether. The Maine People’s Alliance has branded them “the fox in the hen house,” working to kill the program from the inside.

Anthem says: There’s no conspiracy here. Spokesman Mark Ishkanian said the company has put up its own $1 million as incentive to independent agents to sell DirigoChoice.

So why aren’t more people joining?

The million-dollar question.

Price seems to be a factor. So is the program’s longevity: Among people who enrolled early, 4 in 10 worried whether the coverage would last.

There’s also some number of uninsured who feel invincible, Ishkanian said, and some who’re waiting a few years until they reach Medicare age.

With all this debate, what’s the future of DirigoChoice?

The state’s working with Anthem on another option: cheaper plans with less coverage. No date yet for those offerings.

DirigoChoice’s contract with Anthem expires in December 2006. The state’s looking at creating a new entity to take it over, similar to Maine Employers’ Mutual Insurance Company, formed after the workers’ comp crisis in 1992.

MEMIC formed inside of three months, according to spokesman Michael Bourque, with just a line of credit from FLEET bank and state approval to add a temporary surcharge to premiums to build up capital.

Workers comp insurance rates have dropped 30 percent since then. MEMIC has 65 percent of the commercial market.

Two broad differences between comp and health insurance that could be potential snags: The workplace is a controlled, regulated environment.

The home isn’t. Plus, in all but a few cases, comp is required by law, which creates a mandatory clientele.

Gov. Baldacci, standing by his program, has issued a new enrollment goal: 21,000 by the end of 2006, between DirigoChoice and new MaineCare parents.

But before the end of the year, expect more announcements and tweaks to the program, along with twists, turns, counter-facts and counter-proposals, particularly with the governor’s race this fall. (The majority of the candidates want the program axed.)

“It’s all very juicy right now,” quipped Katherine Pelletreau of the Maine Association of Health Plans.

Copy the Story Link