Maine succeeds in adopting nonviable reform
Portland Press Herald
June 14, 2003
Innovative health bill embraced
By Josie Huang
State lawmakers embraced one of the nation’s most ambitious attempts at health-care reform Friday, passing a bill that promises affordable coverage to all Mainers within five years while controlling health-care spending statewide. National policy analysts have described the bill’s focus on access, cost and quality as groundbreaking at a time when other cash-hungry states are taking slower, more cautious steps.
Others attach “first-in-the-nation” to the bill’s centerpiece, the state-sponsored Dirigo Health insurance program that would use the state’s buying clout to offer low-deductible but comprehensive health plans through private insurance carriers.
Democratic Sen. Sharon Treat, the bill’s chief sponsor in the Senate, said the program aims for the same goal of universal health care as a single-payer health-care system, a controversial measure being studied by a legislative panel. But, she said, Dirigo Health is not “disruptive to the current system we have.”
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Comment: Before we begin the celebration we should look at some of the details of Maine’s “universal” health care program. The following points were culled from numerous reports and, therefore, may not provide a precise or entirely accurate description. But they do provide a general perspective of this “first in the nation” program of “affordable coverage for all.”
- The system relies on private health plans which ensures that administrative waste will continue to be a prime feature of Maine’s health care system. Worse, using multiple private plans will perpetuate the inequities that are characteristic of a market that thrives on cost shifting, adverse selection, overt and covert manipulation of benefits and other measures that allow insurers to create inequities largely to benefit their own industry.
- Employers will be expected to contribute about 60% of the costs of the coverage. Maine has a large number of small businesses which already have had difficulties funding adequate health care programs for their employees. Many employers simply will not be able to afford the coverage.
- Lower income individuals who do not qualify for public programs nor meet the definition of poverty will still not be able to afford their portion of the premium, and, consequently, will not be able to participate.
- Medicaid expansion is another feature of the program. Expanding this chronically underfunded program will result in more cost shifting and greater impaired access because of a lack of participation by “unwilling” providers.
- A portion of the funding is through the state give-back provision of the latest tax-cut bill recently passed by Congress. This hardly constitutes a reliable long-term source of funding.
- Another portion of the funding is through an assessment on insurers which the governor states would not be passed on as higher premiums. But consumers always pay business overhead in one form or another.
- Participants would be charged “subsidized fees that would vary according to their ability to pay and the amount of coverage purchased.” Obviously this suggests that those with modest incomes cannot expect to have access to the same level of care as the more affluent would. Does this mean total hip replacements for the affluent and walkers for the poor?
- Part of the funding would be through the savings achieved through decreased utilization of emergency facilities. But the savings will be in marginal costs only which will prove to be a relatively paltry sum. And much of the savings will vanish if no attempt is made to establish evening and weekend clinics when the breadwinner is able to provide transportation for his/her family.
- Prices (not costs) will be controlled for one year only by a voluntary effort to cap price increases to 3.0% for physicians and 3.5% for hospitals. A transitional voluntary cap cannot have any significant long term impact on health care costs.
- If the Dirigo Health program fails, the Legislature is authorized to adopt a “high-risk pool model.” The performance of high-risk pool models in other states has been less than sterling. Very high costs, poor coverage, and long waiting lists have plagued these programs.
Maine is to be admired for its intense efforts to provide health care access for everyone. But the process began with the false premise that all vested interests must be included. Private health plans are the source of many of the problems in health care (administrative excesses, adverse selection, erecting financial barriers to care, limiting choice, inability to contain costs, creating inequities in coverage, etc., etc.). Public administration of the health care system was never a serious consideration, in deference to the health plans. Thus policies were developed to benefit the plans while sacrificing the goal of an affordable, comprehensive and truly universal system.
The California Health Care Options Project has demonstrated that reform models that build on the current system of private health plans and public programs are the most expensive models of reform, and they fail to achieve universality and equity. Dirigo Health is no exception. Maine’s program is particularly weak because it relies very heavily on voluntary compliance with many aspects of the program. Unfortunately, we will continue to hear about Maine’s struggles with its health care system because a program built on an infrastructure of wet noodles cannot possibly perform.
Those of you in Maine who are continuing to craft the single payer model, please do not leave your tables. Maine desperately needs your program, as will soon be evident.