What’s new in Washington, D.C. is old news in Maine. While Congress debates the merits of government-run plan as part of the Democrats’ health reform package, in Maine we are in year four of our state-level public plan experiment. It has been a costly failure.
Public-option advocates, including President Obama, House Speaker Nancy Pelosi and Senator Ted Kennedy, allege this type of health care reform will cover millions of uninsured Americans, reduce health care costs, and improve the quality of care available to American families.
In Maine, we were promised these same results a few years ago when Democratic Governor John Baldacci first proposed Dirigo Health, the first state-level universal health plan to pass in this decade. The core strategy was its government-run public plan called DirigoChoice, which took effect in 2005. Dirigo, Maine’s state motto, is Latin for “I Lead.”
Dirigo passed in 2003 with bipartisan support, based on promises made by the governor and other supporters of this big government overhaul. At that time, legislators and the public were assured the taxpayer-funded government-run plan would cover all 128,000 uninsured Mainers by 2009. Taxpayers were also promised that Dirigo would pay for itself by through savings government would create within Maine’s health care system and that funding for the program would never require new taxes or tax increases. Sound familiar?
Today, the year in which every uninsured Mainer was to be covered by this public-option plan, just 9,600 people are enrolled in DirigoChoice. Only 3,400 of those were previously uninsured at enrollment—a scant three percent of the total number of Mainers without health coverage. The remaining 6,200 Dirigo enrollees have moved from private health care coverage to the taxpayer-funded government plan. This high level crowd-out for Dirigo mirrors national figures for Medicaid and SCHIP.
To achieve these pathetic outcomes, Dirigo has cost state taxpayers $155 million over the past four years - a lot of money for a state with 1.3 million people. DirigoChoice’s premiums have skyrocketed 74 percent in four years – four times faster than state employees’ health premiums. DirigoChoice benefits have been slashed, with coinsurance increasing 20 to 30 percent). And the program has been closed to new enrollees for nearly two years. So much for reaching the uninsured.
To fill its funding gap, yet another promise was broken.
On April 15, 2008, Tax Day, the Maine Legislature, with a party line vote, passed an $80 million tax increase on beer, wine, soda and flavored water. (Sound familiar to federal funding proposals?) Although this tax hike was billed as a mechanism by which Maine could continue its “coverage” of the uninsured, citizens and business owners united to mount a people’s veto campaign that led to a two to one vote to repeal the tax increase during last November’s election.
The significance of this repeal cannot be overstated. Mainers were so mindful of Dirigo’s failures that they were unwilling to pay just 4 to 7 cents more for beverages in order to continue funding the program. This message was ignored by the politicians serving in the Maine Legislature.
Just a few weeks ago, the legislature passed a 2.4 percent tax hike on health care claims to fund the government plan. This Dirigo tax raises the cost of family health insurance by up to $400 a year. Despite the facts and the sentiment of the voters, Maine politicians couldn’t resist raising taxes to fund a failing government run public plan.
Without question, Dirigo has been an unmitigated disaster.
Rather than learning from the failures of Maine’s public option plan, Democrats in Congress (and possibly Maine’s own Senator Snowe) aim to duplicate it. They are undeterred by a trillion dollar-plus price tag. They cast aside reports by the nonpartisan Congressional Budget Office confirming the plan will increase health costs and add to the unprecedented federal deficit. They ignore polling results showing half the country opposes a public option plan.
A government run public plan has been a costly failure for Maine. To impose the same on the rest of the country is something American families simply cannot afford.
Tarren Bragdon is president and chief executive officer of the Foundation for Government Accountability, a research and advocacy organization committed to making Florida the most economically vibrant state in America. He is nationally recognized expert on health reform issues with a specialty in Medicaid reform.