Health insurers put thumb on Dirigo scale

Portland Press Herald
Wednesday, April 26, 2006
MAINE VOICES: by Jenny Rottmann

The insurance industry wants you to believe that the financing of Dirigo Health is "terribly flawed." They insist that this part of the program is "controversial" and "legally challenged." The industry says it can step in with a "compromise" that will fix the problem.

No details on this "compromise" are yet available, and parties that represent average consumers have conveniently been left out of discussions about such a compromise.

Nevertheless, full-page ads have been running in this newspaper to urge support. (Did you know it costs over $4,500 to run a full-page political ad?)

Not surprisingly, the resulting debate around Dirigo Health has been confused because big-money insurance companies can afford to manipulate the dialogue.

Fortunately, those who have watched health reform debates play out over the past few years can see through the rhetoric here.

Once again, the insurance industry's charges are baseless.

Dirigo's financing mechanism is "controversial" only because the industry says it is. It is "legally challenged" only because they have filed suit against it. It is "terribly flawed" only because it is terribly inconvenient for the industry.

Yes, Dirigo does actually call on the insurance industry to do something. That is how it is supposed to work, and how it does work, if the industry will only do its job.

Here's how Dirigo works:

The state sets guidelines for containing costs and accounting for the results. Check.

Health care providers go to work and actually charge less for their services under Dirigo. Check.

The superintendent of insurance conducts a review and determines the savings ($43 million). Check.

Now - insurers negotiate payments with providers to reflect the savings so that the Savings Offset Payment they make (also $43 million) is a wash. And thousands of people get subsidized health insurance as a result.

No check, unfortunately.

Unlike state government and health care providers, the insurance industry apparently has no intent of carrying out its responsibilities under Dirigo.

It has been lobbying our legislators for months, and is now spending thousands of dollars to convince the public that it shouldn't really have to do anything.

Sound familiar? The insurance industry campaign against Dirigo is no different from the industry campaign against national health reform in the early 1990s.

Or the pharmaceutical industry's campaign against Maine Rx, which helps bring lower-cost prescriptions to Mainers, in 1998.

Or the insurance and pharmaceutical industry's recent campaign to make sure the Medicare Part D prescription drug program was as complicated and expensive as possible.

The intent in all these campaigns is to maximize the industry's profits, thus increasing the cost to the consumer and the taxpayer, and then to confuse the public about the real sources of health care inflation.

The simple truth is that the insurance industry has no real interest in keeping costs down. They just want to pass them along, and then blame someone else for their own lack of effort.

Consider these facts: Anthem, Maine's largest health insurer, just paid its CEO a $43 million bonus for buying out the largest managed care company in California. And $43 million is also the entire amount of the savings that Maine insurers are supposed to recover to help pay for Dirigo.

This company can afford to reward one employee with a bonus equal to all the health care savings achieved in Maine.

The target in the industry's current assault on Dirigo is LD 1935, the bill that would require insurers not to pass along the Savings Offset Payment to ratepayers.

This is what they are already supposed to be doing, but have not.

Instead, they have included the full amount of the payment in rates, and then claimed that they have also included savings, while conveniently neglecting to tell anyone what those savings are.

This game has to stop now. The Legislature needs to pass LD 1935 to keep the industry honest, and it also needs to require far more disclosure in industry filings, so they are publicly accountable.

The cost of health insurance is a problem in Maine, and everywhere else. Dirigo is part of the solution for high costs, and must be allowed to work.

Everyone needs to contribute to the solution if we are to make health care affordable, increase access, and improve quality.

We suggest that the insurance industry stop filing lawsuits against Dirigo, stop buying full-page ads to persuade us that black is white, and start fulfilling its obligations under Maine law.

Then, and only then, will we make real progress on health care reform.

- Special to the Press Herald

About the Author 
Jenny Rottmann is the statewide healthcare organizer at the Maine People's Alliance, headquartered in Portland.

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