COD E R E D

State Initiatives: Dirigo HealthIn June 2003, Maine passed the Dirigo Health Reform Act “to make quality, affordable healthcare available to every Maine citizen within five years and to initiate new processes forcontaining costs and improving health care quality.” 360 The program aims to ensure access tocoverage to as many as 180,000 state residents by 2009, specifically targeting small-businessemployees, the self-employed and individuals. 361 The cornerstone of the act is the Dirigo HealthPlan (DHP), a statewide voluntary health insurance program aimed at offering comprehensivehealth care through MaineCare (the state’s Medicaid program) and private insurance carriers.The program largely depends on the success of several cost savings measures beingimplemented by the state. One such measure is a “savings offset payment,” whereby thesavings resulting from reducing the amount of uncompensated care will be redirected, through atax of up to 4 percent on insurers, to help finance the plan. 362 The success of the program isalso dependent on the willingness of small businesses to participate in the plan.Dirigo Health Program EligibilityThe DHP will be rolled out in two phases:Those eligible under Phase One (first year of implementation):• Three months after Dirigo Health begins enrollment, Medicaid (i.e., MaineCare)eligibles expanded to single adults (non-categoricals) from 100 to 125 percent FPL,parents of MaineCare eligible children from 150 to 200 percent FPL, and SCHIPchildren from 200 percent FPL.• Businesses with fewer than 50 employees.• Self-employed individuals.• Individuals.In Phase Two (second year on), eligibility will be expanded to businesses with more than 50employees. 363Dirigo Health Financing MethodThe plan is projected to cost about $90 million in the first year and is projected to be self-fundedafter that. The plan hopes to save $80 million per year by eliminating unreimbursed medicalcosts. 364 The program is financed through a variety of mechanisms:1. For the first year of operations, $53 million in state general revenue. 3652. Medicaid dollars for those who are eligible for MaineCare. 3663. Coverage expansion to noncategorical adults financed by redirecting a portion of itsdisproportionate share hospital (DSH) allocation.4. Employer contributions: Employers pay a minimum of 60 percent of the employee costof the premium, even for those who are eligible for MaineCare. Although employersmust offer family coverage, they are not responsible for covering any portion of thiscoverage. 3675. Individual contributions: Individuals who are eligible for MaineCare pay nothing, 368 andthose with incomes above MaineCare but below 300 percent FPL pay discountedmonthly premiums and deductibles and limited total out-of-pocket expenditures. 369 Theamount individuals are required to pay is determined on a sliding scale based onincome.C-27