Maine Meltdown--Tax Increase to Subsidized State Health Care A Step Closer to Repeal
Through its Dirigo Health reform plan, Maine seeks to make quality, affordable health coverage available to every resident by 2009, while at the same time slowing the growth of health costs. The plan's centerpiece is an insurance subsidy program, DirigoChoice, which offers affordable health insurance to small businesses and to families with low to moderate income.
Thats what state officials proclaim about DirigoChoice; however, Dirigo is proving to be a costly failure.
It has cost Maine taxpayers $100 million since 2005 and without a tax increase of between $57 and $72 million to prop it up, it goes in for radical surgery. According to the Ellsworth American, it costs taxpayers $2,977 per enrollee per year in premium subsidy and as of April 2008, only 12,637 individuals were covered by DirigoChoice, less than 1% of the state's population.
To pay for increased costs of the plan, Maine lawmakers put a first-ever tax on soft drinks, doubled the existing taxes on beer and wine, and levied a 1.8% tax on health care claims paid by insurers and third-party claims administrators.
The meltdown comes in because a group of citizens called Fed Up with Taxes circulated a petition to repeal the taxes. It needed 55,000 signatures to qualify by July 17 and yesterday the Maine Secretary of State received 90,000 which is pretty telling for a state with 1.3 million people.
Washington lawmakers ought to take note of what is happening around the rest of the country BEFORE they launch a new grand health care reform scheme like they did in 1993. They need to DO THE MATH in advance to project what these programs will actually cost and ask the question: "Will they solve the problem without bankrupting the state or triggering a tax increase."
The Maine experience is but one from which Washington elected officials can learn valuable lessons. They need to CONNECT THE DOTS on what is working and fix what is not.
Don C. Brunell (DonB@awb.org)
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