AUGUSTA – DirigoHealth, the state’s health insurance program, has received an $8.5 million grant from the federal government to help cover more of the state’s uninsured, officials told legislative budget-writers Wednesday.

The money will be directed to a new program that targets part-time employees of larger businesses, officials said during a briefing before the Appropriations Committee.

DirigoHealth was created in 2003 to help expand the availability of affordable health insurance to small businesses and their employees after Maine was awarded a similar grant.

The new grant “may not supplant existing resources or expenditures and must serve new populations,” said Trish Riley, director of the Governor’s Office of Health Policy and Finance.

Riley said $6.6 million of the funding, which was awarded on an annual basis but is renewable up to five years, would go toward subsidizing health insurance.

“Eligible, part-time workers who have access to a large employers’ health coverage can get a voucher if they are under 300 percent of (the poverty line) and if they are uninsured,” Riley said of the new program, tentatively set for launch in April.

“They can go back to their workplace and they can use that voucher to purchase employer-based coverage,” she said. “This will finally get us into the voucher business that we’ve talked about for a long time as an important new arm of the Dirigo program.”

The vouchers would only be available to part-time employees in companies that employ 50 or more full-time people.

Riley, who serves on the DirigoHealth Board of Trustees, said that because some part-time employees are not offered insurance by their employers, the agency plans to design a health insurance program specifically for them.

“We’ve not really started the piece of that work because we don’t know how much of the money will be used in the voucher program, so we don’t want to get too far ahead of ourselves until we know what the budget looks like,” she said.

A business advisory group has been working on the new program with Dirigo officials, as required by rules of the grant. The group is scheduled to meet Friday to discuss the plan in more detail.

“The grant required us to engage stakeholders and we very much wanted to get back to working with people who helped bring Dirigo but who had, quite candidly, become some of its enemies,” Riley said.

“We were very pleased, for example,” she said, “that the (Maine) Chamber of Commerce supports this application and has agreed to serve on a business advisory group that we have needed to help guide us and get feedback from the industry about what makes sense to them.”

The Dirigo agency has received much criticism since its origin for failing to live up to expectations, both in terms of cost to taxpayers and ability to provide affordable insurance to a significant number of Mainers.

It received a $25 million loan from the general fund in this year’s budget to help transition from one revenue stream to another.

Karynlee Harrington, executive director of DirigoHealth, told lawmakers that the agency was on track to pay back the loan in full by the June 30 deadline.

She said the board has spent a lot of time looking at how to make the program less expensive so it can cover more people.

“We’ve got thousands of people on the waiting list, and we look forward to getting to a point in the next fiscal year where we have a cheaper product which will allow us to expand coverage to more people,” Harrington said.

rmetzler@sunjournal.com

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