AUGUSTA (AP) – Gov. John Baldacci on Wednesday proposed a major change in the structure of Dirigo Health, which is developing into one of the most contentious issues in the gubernatorial campaign.

Baldacci wants to authorize Dirigo’s board to self-insure instead of contracting with a private company to provide coverage to the thousands of Mainers who lack or can’t afford health insurance. The state’s current contract with Anthem Blue Cross-Blue Shield ends Dec. 31.

The governor said that by going with a self-insured system, the profit-making middleman is removed from the picture and resulting savings are used to pay for more coverage. In his announcement, Baldacci cited other Maine employers who self-insure, such as L.L. Bean, Maine state employees and Cianbro construction company.

“If the Legislature enacts this proposal, we will have the necessary options available to guarantee the best product at the best price and effectively reach even more people,” the governor said.

The proposal goes to lawmakers as Dirigo becomes a topic of heated debate in the gubernatorial campaign. Republican critics say it’s become too dependent on public financing and that Dirigo needs major surgery.

A great deal of the debate has been over a key funding mechanism for the 3-year-old program known as savings offset payments, or savings resulting from Dirigo reforms in Maine’s health care system. The state requires insurers to make payments based on those savings.

Insurers, including Anthem, say they can pass those fees through to their customers, but Baldacci objects.

Anthem spokesman Mark Ishkanian said the company was not surprised by the announcement by Baldacci, who hinted at it during his State of the State speech earlier this year. Whatever the Legislature does with Baldacci’s plan, Anthem for now is focused on “making Dirigo as successful as possible,” said Ishkanian.

The spokesman said removing profits from the equation may not result in the expanded coverage Baldacci envisions, because profits now are only “pennies on the dollar.”

Baldacci, a Democrat who is seeking re-election, acknowledges that the program he’s championed is a work in progress. But he said it’s insuring 15,000 people now and has brought about savings in Maine’s health care system.

“For all the rhetoric and the politics surrounding Dirigo Health, here are the facts: We are saving money and costs are being controlled,” said Baldacci, whose administration estimates savings achieved through Dirigo at nearly $44 million.

Baldacci said he wants Dirigo to move to a self-insured system as of Jan. 1.

In an interview with Maine Public Radio, Baldacci said the change he envisions would extend Dirigo coverage to more people.

By avoiding administrative costs and profits, “you’re able to stretch those dollars over more people and lives and (are) able to really get more affordable health care out there,” the governor said.

AP-ES-03-15-06 1636EST

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