AUGUSTA (Dec 22): A special health-care commission empowered by the governor reaffirmed its support Tuesday for raising sin taxes to pay for the Dirigo Health subsidized insurance program, and also recommended the state consider requiring employers to offer health insurance and individuals to buy it.
The proposed sin taxes, including an increase in taxes on cigarettes, beer and wine — and new taxes on soda and snacks — would raise $67 million if all were enacted. The governor’s Blue Ribbon Commission on Dirigo Health also recommended that some way be found to collect from insurance companies or providers the $5 million to $8 million saved in bad debt and charity care as a result of the Dirigo Health initiative.
Gov. John Baldacci must now approve the report and pass his recommendations on to the Legislature, which will have the final say.
If the Legislature doesn’t approve the taxes, the state next year could revert back to a $34 million “savings offset payment,” which is charged to private insurance companies and self-insured businesses, and ultimately passed onto consumers.
The state is already collecting a $43.7 million savings offset payment to cover 12,500 people in 2006. The insurance plan, called DirigoChoice, is administered by Anthem and subsidized by the state on a sliding scale based on the income of those enrolled.
Part of the money also has been used to expand traditional Medicaid to 5,090 low-income parents. The point of the Dirigo Health program is to reduce the number of uninsured in Maine.
Asked if the governor would approve a hike in sin taxes, Trish Riley, head of the Office of Health Policy and Finance, said she expected Baldacci to give the report serious consideration based on the diverse backgrounds of the members he had appointed.
“He was clear that if they came up with recommendations, he wanted to look really seriously at them,” Riley said.
The commission, which included representatives of hospitals, doctors, insurance companies, major employers, labor unions and affordable health-care groups, approved the sin tax hikes by sizable majorities.
Members also called for the state to look at the possibility of mandating that businesses of a certain size be required to offer health insurance or pay a fee, and individuals making more than 400 percent of federal poverty — or $39,200 annually — be required to purchase some type of coverage.
Massachusetts has become the model for such mandates as it moves to implement its plan for universal coverage in 2007. Under the law there, individuals have to buy coverage — just like drivers have to have auto insurance — or face a fine. Those who can’t afford it will get a subsidy from the state. Employers also have to offer insurance, and if they don’t, have to pay $295 a year per employee into a pool.
One of the key issues in Maine will be deciding what size company could be subject to the mandate, given that 79 percent of businesses in Maine employ fewer than 10 people. The concern is a mandate on a company that small would be an economic hardship.
But commission member Joan Donahue, who owns a small home care company, said if big companies are asked to provide health insurance, so should small ones.
“We all want to hold the big-box stores accountable,” she said. “I find it disturbing as a small business owner in Maine that we’d hold ourselves any less morally responsible.”
The commission also voted to study other changes in health insurance law that would allow the merging of individual and small group markets to spread out the risk of individuals, whose claims tend to be higher. It also recommended looking at some form of a high-risk pool in Maine, where the people most expensive to insure would be segregated from the rest.
There also was support for another study committee to look at health-care cost drivers in Maine, including the cost of providers and insurance.
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