1	Maine’s Dirigo Health System: An Overview Last updated: June 9, 2004 Prepared by Joseph P. Ditré, Esq., Exec. Dir. Consumers for Affordable Health Care Foundation www.mainecahc.org 1-800-838-0388 39 Green St., P.O. Box 2490, Augusta, ME 04338-2490 Advocating the right to health care for every man, woman and child!
2	Publication, citation and circulation This document was published by Consumers for Affordable Health Care Foundation (CAHC Foundation). CAHC Foundation is a non-profit, non-partisan, charitable organization whose mission is to advocate for quality, affordable health care for all citizens of Maine and the nation. Its activities include research, analysis, outreach, education and advocacy as well as the provision of free legal services to health care consumers denied needed care or coverage. This document was prepared to aid small businesses, self-employed people and community-based organizations in understanding the Dirigo Health system in Maine and enable them to make decisions about its coverage, benefits and financing. Please make the appropriate attribution to CAHC Foundation and its author when reproducing, citing or circulating it. CAHC Foundation publishes a quarterly newsletter, periodic reports, and a small business edition of its newsletter. It also makes available its comments and analyses of proposed legislation, health care and health insurance regulations and other proposed health planning documents. To subscribe to CAHC Foundation’s publications, please go to our website at www.mainecahc.org or call 1-800-838-0388 and ask for Bonnie Buckmore.
3	Overwhelming Bi-Partisan Support for Dirigo Health (LD 1611, PL 2003, Ch. 469) Final Roll Call (#247) in the Maine House of Representatives Yes – 105 No – 38 Absent – 8 Bill needed 72 for simple majority to pass
4	Dirigo Health System Framework An Integrated System Focused On: Access, Cost containment, and Quality improvement
5	Who Is Eligible for Coverage? Small businesses (2 - 50 workers, includes municipalities w/ 2 - 50 employees) Self-employed (includes sole proprietorships) Individuals without access to job-based coverage from an eligible business Dirigo Health Board may include large public or private employers
6	What Services Will Dirigo Health Cover? Comprehensive major medical coverage Coverage emphasizes preventive & wellness care 100% coverage of preventive & wellness care -- no out-of-pocket costs Healthy ME Rewards Program will pay $100 to enrollees who complete health needs questionnaires and meet goals Fitness club discounts
7	What Preventive Services Are Covered? Preventive & Wellness Care includes -Well baby care -Immunizations and flu shots -Routine physicals -Blood tests -Pap tests -Mammograms
8	Dirigo Health Ends “Premium Lockout” Traditional insurance premiums are “one size fits all” Today, if you can’t pay, you can’t play Dirigo Health ends “premium lockout” – everyone can play Premiums and deductibles vary based on household income
9	Premiums and Cost-sharing Under Dirigo Health Premiums, deductibles and out-of-pocket maximums are based on household income Copayments are nominal for those with HH income at/below 125% FPL and standardized for all others Co-insurance – none for those with HH income at/below 125% FPL and 80%-20% for all others
10	Copayments for Households At or Below 125% FPL For Those in Income Group A (at/below 125%) Primary care office visit - $3 co-pay Specialty care office visit - $3 co-pay Prescription drugs - $2.50 co-pay Diagnostic tests, hospitalization, etc. are covered without out-of-pocket costs
11	Copayments for Households Over 125% FPL For Those in Income Groups B to F (over 125% FPL) Primary care office visit - $15 co-pay* Specialty care office visit - $25 co-pay* Prescription drugs - $10/$25/$40 co-pays* Diagnostic tests, hospitalization, etc. are covered after payment of deductible and 20% co-insurance *Co-pays do not count toward the deductible
12	Option 1 Cost-sharing Option 1 (sliding scale based on HH income) Up to $1,250 deductible Up to a maximum out-of-pocket of $4,000 - Projected monthly premium of $282 (for employee only coverage) Employer share of $169 (60%) Employee share of $113 (40%)
13	Option 2 Cost-sharing Option 2 (sliding scale based on HH income) - Up to $1,750 deductible - Projected monthly premium of $260 (for employee only coverage) Employer share of $156 (60%) Employee share of $104 (40%)
14	What Will Dirigo Health Cost Participating Employers? Employers must pay 60% of the monthly premium for each employee Employers are only required to pay a pro-rated portion for each employee who works at least 20 but not 30 hours per week Employers must pay a program fee of $150 to $350 per year based on number of employees
15	Additional Options For Employer Contributions Employers may pay more than 60% of their employees’ premiums if they choose Alternatively, employers may establish medical reimbursement accounts Employers will not be required to contribute toward the cost of covering dependents, but they may do so if they choose
16	Projected Monthly Costs (without discounts)
17	How Will Discounts Work? Individuals and families with incomes below 300% of federal poverty level will be eligible for discounts Monthly premiums, annual deductibles and out-of-pocket maximums will be discounted based on household income
18	Discounts Available from Dirigo Health
19	Example of John Employer offers coverage under Option 1 Single adult with annual income of $14,500 Projected monthly premium of $282 Employer pays $169 (60%); John pays $113 (40%) Out of the $113 employee portion, Dirigo Health will reimburse John $50 – ultimately, John only pays $63 Deductible of $500; out-of-pocket maximum of $1,600
20	Example of Lucy Employer offers coverage under Option 1 Married with one child and an annual household income of $23,000 Chooses to enroll herself and her child - projected monthly premium of $507 Employer pays $169; Lucy pays $338 Out of the $338 employee portion, Dirigo Health will reimburse Lucy $338 – ultimately, Lucy pays nothing No deductible; co-pays limited to $2.50 for pharmacy and $3.00 for physician office visits
21	What Is the MaineCare “Wraparound”? Some employees, such as Lucy, may enroll in Dirigo Health through their employers and meet MaineCare income guidelines as well They may choose to enroll in both programs to eliminate their deductibles, reduce their co-payments and become eligible for some additional services
22	MaineCare Expansions Under Dirigo Health MaineCare eligibility will be extended for single and married adults without dependent children from 100% up to 125% of the federal poverty level It will be extended for parents from 150% to 200% of the federal poverty level 13,837 individuals (67% of them parents) will become eligible for MaineCare in FY 2005 Delayed for three months by Maine Legislature in ’04-’05 budget
23	When Will Dirigo Health Be Available? Dirigo Health Agency released the RFP on May 7^th Dirigo Health will be available on or around October 1^st depending on responses to the RFP DHA expects bidders from inside and outside Maine If no bid is made, the state will establish a non-profit insurance agency or use Maine DHS
24	State Health Plan - Purpose “Purpose. The plan…must set forth a comprehensive, coordinated approach to the development of health care facilities and resources in the State based on statewide cost, quality and access goals and strategies to ensure access to affordable health care, maintain a rational system of health care and promote the development of the health care workforce.” P.L. 2003, Ch. 469, Part B, §103(1)
25	State Health Plan - Uses To determine Capital Investment Fund amounts To guide issuance of Certificates of Need and public financing “A CON or public financing…may not be provided unless it meets the goals and budgets explicitly outlined in the [state health] plan.” See P.L. 2003, Ch. 469, §103(4).
26	Cost Containment - Mandatory Places a one-year moratorium on new CON projects (DHS BMS Emergency Rule, began May 5, 2003) Statewide Capital Investment Fund - limits capital expenditures and equipment purchases on an annual basis Extends CON to “ambulatory surgical facilities that functions also as a health care practitioner’s office” CON required where capital expenses are at or above $2.4 million and equipment costs at or above $1.2 million “New health services” includes “new technology” costing $1.2 million or more located in the private office of a health care practitioner
27	Cost Containment - Voluntary Asks hospitals to place a voluntary 3% limit on operating margins and 3.5% limit on cost increases (began July 1, 2003) Asks doctors and health care practitioners to voluntarily limit their net revenue growth to 3% (began July 1, 2003) Asks health insurance carriers to put a voluntary 3% limit on underwriting gains (began July 1, 2003)
28	Capital Investment Fund Sets an annual limit on CON allocations Divides total CIF amount into hospital and non-hospital components Divides hospital and non-hospital components into large and small CIF amounts Non-hospital component must be at least 12.5% of total for first 3 years of plan
29	Strengthened Insurance Regulations Extends rate review and hearing process that now applies to individual products to small group products Requires annual report to Bureau of Insurance that includes medical claims expense, administrative expense and underwriting gain for each line segment of the market Rate filings are public records Standardizes definitions of administrative expenses, medical claims expense, profit and underwriting gains Requires large group insurance carriers to file actuarial certification of cost savings with their rate filings
30	Small Group Rate Regulation Small group rate review – hearing if rates are determined “excessive” Requires 75% “loss ratio” Optional guaranteed loss ratio set at 78% for a continuous 3-year period with no hearing Refund to policyholders if 78% not met Small group rate filings are public records
31	Large Group Rate Regulation Annual informational filing (groups over 50) Certification – rating methods and practices meet GAAP and actuarial standards Certification – carrier’s reported experience includes savings offset payments and recovery of such payments Filings are public records
32	Maine Quality Forum – Quality Improvement Functions Maine Quality Forum coordinates data and quality initiatives Four primary functions: Collect/disseminate evidence-based research; Provide consumers with useable information to compare provider performance; Consumer education to promote informed decisions and healthy lifestyles; and Technology assessments to inform CON and State Health Plan.
33	High Risk and Disease Management Sets up a high risk and disease management pool within the Dirigo Health Agency High risk – costs for an enrollee exceed $100,000 in 12-month period or enrollee diagnosed with one or more of 25 specified conditions Disease management protocols must be developed, implemented and provided to enrollees Enrollees are not placed in a segregated risk pool with different coverage or costs
34	Dirigo Health Funding Sources $53 million in federal fiscal relief during first year Voluntary contributions (small businesses, self-employed and individuals) Federal matching dollars for people eligible for MaineCare Up to a maximum 4% savings offset payment (SOP) on health insurance premiums starting second year
35	Savings Offset Payment SOP is applied to health insurance premiums and is capped at a maximum of 4% SOP depends on cost savings resulting from decreasing rates of growth in the State’s health care spending and in bad debt and free care costs. There is no SOP if there are no amount of cost savings as a result of the operation of Dirigo Health or the expansion of MaineCare SOP recovers a portion of premiums currently devoted to uncompensated care SOP used to provide subsidies to employees and individuals, and fund a portion of Maine Quality Forum costs SOP is commensurate with aggregate savings achieved under Dirigo Health
36	Contact Information Dirigo Health Agency, Ex. Dir., Tom Dunne Phone: 207-624-9838 Website: www.dirigohealth.maine.gov Governor’s Office of Health Policy and Finance, Ex. Dir., Trish Riley Phone: 207-624-7442 Website: www.maine.gov/governor/baldacci/healthpolicy/index.html Consumers for Affordable Health Care, Ex. Dir., Joseph Ditre, Esq. Phone: 1-800-838-0388 Website: www.mainecahc.org Dirigo Health Now! Campaign, Chairman, Marc Mutty Phone: 207-773-6471
37	Income Group Determination Tables
38	Income Group Determination Tables (continued)
39	Dirigo Health Option 1