“Death spiral” is a catchy phrase, but an uninspiring descriptor of Maine’s individual health insurance market.

The spiral starts when health insurance, either through the market or government regulation, becomes too expensive. People drop coverage, become sick, and then decide to buy insurance again. Since they’re sick, coverage costs insurers a mint. These costs are recovered through premium hikes, which cause more people to drop coverage.

Voila. A death spiral.

Anthem, the lone private provider of individual health insurance in Maine, says it lost $10 million in this sector last year, and of the approximately 30,000 Mainers buying individual insurance, some 243 generated about 48 percent of this group’s overall health care costs.

These are unsustainable numbers, which is why Anthem is lobbying the Legislature to enact a “re-insurance” pool – read as high-risk pool – to spread the costs of those making the greatest demands on the system over the widest possible base. This was the subject of public hearings in Augusta this week.

On the other side of this is DirigoChoice, the state’s underwhelming subsidized health insurance plan. It has a catchy slogan, too, “Dirigo 2.0,” to describe adjustments to the controversial program, which includes a “pay or play” provision to compel universal insurance coverage.

Slick phraseology, however, can’t belie the seriousness of Maine’s health insurance crisis. Anthem is crying for reform, stuck with a monopoly it cannot escape, while the ills of Dirigo were recently chronicled for the nation by The New York Times, which painted the program as a model others shouldn’t emulate.

Gov. John Baldacci told The Times the early days of Dirigo were like “groping in the dark,” and equated “Dirigo 1.0” to a bicycle with training wheels. After four years, and failure to meet lofty benchmarks, the governor’s frank admittance of Dirigo’s shortcomings was stunning, but entirely welcome.

Maine is at a crossroads of care. Lawmakers are studying the removal of regulatory restrictions on health insurance, much to Anthem’s delight, but concerning consumer advocates. Dirigo 2.0 promises to rejuvenate a program that’s losing its reputation as a policy innovation.

Both proposals have merit, and lawmakers should not be afraid of injecting market solutions into health insurance, while also following the governor on resculpting the worthy Dirigo. The conditions giving rise to the insurance crisis years ago haven’t improved, which should make all solutions open for consideration.

Maine’s health insurance woes have become too big for either the market or the government to repair on its own. Parallel reforms to Dirigo and the insurance market have the best chance of succeeding.