AUGUSTA (AP) – Anthem Blue Cross and Blue Shield will not provide health coverage to Mainers through the state’s Dirigo Health Agency after this year ends because the two sides could not agree on terms to extend the contract.

In a joint statement Wednesday, the two sides said they were unable to agree on acceptable financial terms to extend the contract for one year.

Dirigo, meanwhile, “is finalizing its plan to transition the program by Jan. 1, 2008, to assure that current members continue to have access to the DirigoChoice product and its subsidies,” the statement said.

About 15,000 subscribers are enrolled in the DirigoChoice insurance product that’s been administered by Anthem since 2003, two-thirds of them with individual coverage and a third in the group market, said Anthem spokesman Mark Ishkanian.

What will happen to those subscribers when 2008 arrives was unclear Wednesday, Ishkanian said, because “we don’t know yet the direction the state’s going to go with the program.” But he said Anthem is committed to helping the Dirigo agency make its transition.

“We want DirigoChoice to succeed,” Ishkanian said. “There are no hard feelings here.”

Anthem is also obligated to offer a similar insurance product to subscribers now covered under a DirigoChoice plan if they choose to remain with Anthem, but their premiums could go up, Ishkanian added.

Trish Riley, director of the Governor’s Office of Health Policy and Finance and one of the Dirigo program’s designers, said current Dirigo members will not be left out in the cold come Jan. 1.

“All of the 15,000 members will have a DirigoChoice product and subsidies as of Jan. 1 and we are working on a seamless transition,” Riley said.

Gov. John Baldacci also stressed in a statement that coverage for DirigoChoice members “will continue without interruption” and that details of the transition are being finalized.

“DirigoChoice will continue as an affordable, high-quality health insurance product after the contract with Anthem ends next year,” said Baldacci, who has championed Dirigo since its start. “My goal is to bring more competition to the health care market in Maine and to pass reforms that will make insurance more affordable.”

Dirigo Health was created by the Legislature in 2003 to curb health care costs, broaden access to coverage for thousands of Mainers who lack health insurance and promote health care quality.

It is funded in part through savings in the health care system generated by the program. In July, Dirigo’s board of directors determined that the program will save $78 million in its third year of operation.

The Maine Association of Health Plans, which represents state’s major health insurers, disputed the figure, saying the savings estimate is excessive. Maine’s major health insurers include Anthem, Aetna, Cigna HealthCare of Maine and Harvard Pilgrim Health Care.

The so-called savings offsets did not come up during the Dirigo-Anthem negotiations, which reached an impasse Aug. 30, said Riley.

Wednesday’s statement by Anthem and Dirigo Health said the two organizations “have worked diligently to make this program a success and feel very good about what has been accomplished over the three years.”

“We are grateful that Anthem Blue Cross and Blue Shield stepped up three years ago to help make DirigoChoice a reality and that they will work with us closely to transition the program,” the Dirigo board’s chairman, Robert McAfee, said in the statement.

AP-ES-09-05-07 1708EDT

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