NU Online News Service, June 13, 2003, 4:59 p.m. EDT – The Maine Senate is considering a bill, L.D. 1611, that would create a subsidized health insurance program for the state’s small businesses, self-employed people and individuals without access to employer-sponsored coverage.

Members of the state House voted 96-47 in favor of the bill Thursday.

The bill, which could impose a new fee on private health insurers, now lacks the two-thirds majority of votes it needs in the House for enactment, but the Senate strongly supports the bill and probably will vote to require only a majority vote, according to a report in the Portland Press Herald that calls final enactment “certain.”

Gov. John Baldacci, a Democrat, organized the effort to develop the program, which he is calling a “universal health program.”

Rep. Christopher O’Neil, D-Saco, chair of the Insurance and Financial Services Committee and chair of the Joint Select Committee on Health Care Reform, introduced L.D. 1611.

The bill would create Dirigo Health, a program that would buy health coverage for small businesses, self-employed people, individuals without access to coverage, and dependents of residents eligible for Dirigo Health program coverage.

The program would try to buy health coverage from private insurers, but it would set up its own, nonprofit insurer if private insurers declined to participate, according to the bill text.

Funding would come from participant premiums, Medicaid funds, funds now spent on charity care and bad debt, and, after July 1, 2005, “savings offset payments paid by health insurance carriers, employee benefit excess insurance carriers and third-party administrators,” according to the bill text.

“The board of directors is required to establish the savings offset amount, not to exceed 4% of [the private carriers'] annual premium revenue or its equivalent, on an annual basis and those savings offset payments may not exceed the aggregate cost savings attributable to reductions in bad debt and charity care costs as a result of the operation of Dirigo Health and the expansion in” Maine’s Medicaid program, according to the bill text.

Baldacci contends that bad debt and charity care now increase private carriers’ costs far more than 4%.

“Sixteen percent of total premium costs today are attributable to bad debt and charity care costs,” Baldacci said in May in a speech promoting the Dirigo Health program.

L.D. 1611 also would require health care providers to supply written information about their prices, and it would require the state to publish annual reports comparing the prices that Maine hospitals and outpatient facilities charge for common procedures and “diagnosis-related groups.”

The text of the bill is available at http://www.mainelegislature.org/legis/bills/LD.asp?LD=1611