Stateline Story

Maine Republicans Say They Will End 'Dirigo' Health Care Experiment

Photo by Pat Wellenbach, the Associated Press
Maine Governor-elect Paul LePage at a health care rally in October. LePage, a Republican, has called Maine's nationally recognized Dirigo health care plan "a costly failure."

Before there was a federal health care overhaul, and before there was a Massachusetts law to use as a model for the national plan, there was Dirigo. That's what Maine called its first-in-the-nation attempt at achieving universal health coverage when Democrats approved the plan back in 2003.

Now, the Maine program may be one of the first casualties of the Republican landslide in state capitals. Maine's incoming governor, Paul LePage, pledged during the campaign to "repeal and replace" the plan, which is Latin for "I lead" and is the state's motto. Republicans also took control of the Maine House and Senate, making the state one of only two to flip from total Democratic control to total control by Republicans (Wisconsin was the other).

Dirigo was the brainchild of outgoing Governor John Baldacci, who sought to dramatically increase coverage for the uninsured while lowering the costs associated with hospital care. A key to the program was encouraging small businesses to buy coverage for their employees by making plans affordable and subsidizing coverage for individuals and families on a sliding scale based on income.

But the program faced battles over funding from the start. In 2007, Maine capped enrollment for two years until lawmakers could agree on a funding fix. The problem was further complicated when voters in 2008 rolled back the tax on soda and alcohol that the Legislature figured would pay for Dirigo. Even its supporters admit the program has never lived up to its promise of serving as many as 180,000 of Maine's 1.2 million residents by 2009.

LePage, a Tea Party favorite, has called Dirigo "a costly failure." He claims taxpayers have spent more than $160 million to cover just 3,400 uninsured Mainers under the program. Baldacci's administration disagrees with that portrayal, arguing that since it began, Dirigo has covered more than 32,000 people without using any general fund dollars to pay for it.

Under a complicated funding arrangement, Dirigo is funded 50 percent by the "savings offset payment" from private insurance companies. That's the amount the state figures insurers are saving because the uninsured aren't seeking emergency care they can't pay for. The rest of the funding comes from premiums, the federal government and tobacco settlement dollars.

Once seen as a model

According to Jon Reisman , associate professor of economics and public policy at the University of Maine at Machias, Dirigo probably would have been the model used had the "public option" survived last year's contentious health care debate. Instead, the Obama administration looked to Massachusetts, which relied on a more market-based approach. 

One of Dirigo's harshest critics has been Tarren R. Bragdon, who is now a co-chair of LePage's transition team and was quoted in The New York Times as saying that under LePage, "Dirigo will be Diri-gone." Bragdon, a former state representative, is chief executive officer of the Maine Heritage Policy Center, which describes itself as formulating "innovative and proven conservative public policy." 

Any changes to Dirigo, let alone outright repeal, will have to come from the state Legislature. It looks as though LePage will have support for a Dirigo overhaul in the statehouse. Republicans will enjoy complete control of state government in Maine for the first time since 1962.The incoming state Senate president, Kevin Raye, has called Dirigo "by every measure, a failure."

The election result in Maine represents a dramatic turn in Dirigo's fortunes. Not long ago, Baldacci's plan was held up by many in Congress as a possible blueprint for national health care reform.

With Maine facing a nearly $1 billion budget deficit for next year, Michael Franz , a Bowdoin College political scientist, predicts Dirigo will be repealed "in the name of budget cuts." But he questions the long-term consequences. "If health care services for the poor are scaled back for short-term budget balancing, this will shift more care into the ER, outside the health insurance system and run up costs in the long-run," he says.

Trish Riley, director of Baldacci's Office of Health Policy and Finance, told The Portland Press Herald that if Dirigo is eliminated, the state will either have to cut 6,700 people off Medicaid, or the general fund would have to come up with the roughly $6 million.

State may join lawsuit

In addition to dumping Dirigo, there's a chance a GOP-led Maine will no longer sit on the sidelines as some 20 other states line up to challenge the new health care law. In Maine, the Legislature, not voters, selects the attorney general. That will occur shortly after the newly elected lawmakers are sworn in and the legislature convenes December 1.

LePage, the mayor of Waterville, has come out against the federal health care law. On the campaign trail, he famously said that if he were elected, voters would see a lot of him on the front page, saying 'Governor LePage tells Obama to go to hell.' "

Brian Duff, a University of New England political scientist, says Maine, through Dirigo, was at the forefront of health care reform and moved the issue forward. "One of the great features of American politics," he says, "is that states take bold steps in policy and then we see how far it goes." "Now we have ideas," but at the end of the day, "there's not a lot of passion for Dirigo."