Myths and Facts
About LD 1611,
"An Act to Provide Affordable Health Insurance to
Small Businesses and Individual and To Control Health Care Costs."
Last updated on 5/1/03

Myth: LD 1611 mandates that small businesses and individuals buy Dirigo Health Insurance.

Fact: Participation in and payment into Dirigo Health are voluntary. Dirigo Health Insurance is another choice for small businesses and individuals when buying health coverage.

Myth: LD 1611 prohibits health insurance carriers from offering individual or small group products.

Fact: LD 1611 does not stop insurers from offering products they currently offer. Small businesses and individuals can keep their current coverage if they so choose.

Myth: LD 1611 will require health carriers to raise their rates because of the 4.1% assessment on health insurance premiums.

Fact: LD 1611 recovers that portion of insurance premiums that carriers now attribute to uncompensated care. LD 1611 would use the money to provide comprehensive health coverage to self-employed and small businesses who cannot afford coverage. As uncompensated care costs go down, insurance rates that reflect those costs should also go down. Earlier this year, insurers supported legislation that assesses them for a "high risk" pool.

Myth: LD 1611 requires a "global budget" for Maine's hospitals.

Fact: LD 1611 does not require or mandate a "global budget." Under LD 1611, the Governor will convene a voluntary working group of representatives of the hospital, medical and osteopathic associations in addition to members of the Governor's Office of Health Policy and Finance. (See LD 1611 at p. 31, lines 34 - 46) The group develops a proposed plan to "promote efficient use of hospital resources…ensuring that rural residents of this State have appropriate access to critical care services as well as primary and preventive care, within a reasonable geographic distance." (LD 1611 at p. 32, lines 6 - 12) The working group presents the Governor with a proposed plan by February 1, 2004. (LD 1611 at p. 32, lines 16 - 18)

Myth: LD 1611 restricts annual hospital expenditures to 3%.

Fact: LD 1611 asks hospitals and doctors to voluntarily restrain increases in their charges to 3% for a one-year period. (See LD 1611 at p. 46, lines 11 - 16). Compliance will be monitored. If the average is exceeded on a statewide basis after one year, the Governor's office will develop plans for a global budget. (See LD 1611 at p. 46, lines 24 - 31)

Myth: Maine hospitals will have to reduce their spending in 2005 by $750 million and 24 out of 39 hospitals in Maine will have to close if LD 1611 is enacted as drafted.

Fact: LD 1611 asks hospitals and other providers to voluntarily develop a plan to restrain expenditure growth. Therefore, no hospitals will be forced to close. However, it is clear that the growth in spending by Maine hospitals has far exceeded the Consumer Price Index. For example, in the year 2002 hospital spending growth was 7 times higher than the CPI.

Some say Maine should wait and study this issue further. Over the past ten years, Maine legislative committees have conducted hundreds of studies of Maine's health insurance and health care systems. Clearly, those support waiting are not faced with crushing rate increases on an annual basis. Ask any small business or self-employed person going without coverage or faced with dropping coverage - they want action NOW!

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