Overview and Analysis of Key Dirigo Health Components A perspective prepared by Consumers for Affordable Health Care with modifications from the Governor - PowerPoint PPT Presentation


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Overview and Analysis of Key Dirigo Health Components A perspective prepared by Consumers for Affordable Health Care with modifications from the Governor


Commission to Study Maine's Hospitals ... Dirigo Health is Maine's new voluntary health plan ... Maine Quality Forum (within Dirigo Health) coordinates data ... – PowerPoint PPT presentation

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Title: Overview and Analysis of Key Dirigo Health Components A perspective prepared by Consumers for Affordable Health Care with modifications from the Governor

Overview and Analysis of Key Dirigo Health
Components A perspective prepared by Consumers
for Affordable Health Care with modifications
from the Governors Office of Health Policy and
Finance October 2003

Health Reform for Maine

Dirigo Health Board of Directors
Governors Office of Health Policy and Finance
Commission to Study Maines Hospitals
Public Purchasers Steering Committee (state
employees, Corrections, MEA, MMA, MaineCare)
Advisory Council on Health Systems Development
State Health Planning Document
Advisory Council
  • Dirigo Health Insurance
  • Private carriers
  • (subsidized health care to 300 FPL)
  • Bad Debt and Charity Care Recovery

Task Force on Veterans Health Services Dept.
of Defense, Veterans and Emergency Mgt.
Maine Quality Forum
  • Insurance Regulation
  • - Rate justification small group
  • - Actuarially validated rate filing
    large group
  • Require physician electronic billing
  • CON
  • Annual Public Health needs/data
  • MaineCare expansion

Maine Health Data Organization
Dirigo Health is Maines new voluntary health plan
  • Individual and small business participation and
    payments are voluntary
  • Businesses and individuals can keep their current
    coverage if they so choose
  • Existing insurance products will still be

Conceptual framework for Dirigo
  • Create Partnership Between Dirigo Health and
    Small Businesses
  • Dirigo Health will arrange health coverage for
    small businesses and participating insurer(s),
    and provide a range of other benefits to members
  • A portion of membership payments for low-income
    workers will be directed to MaineCare via
    interagency transfer
  • Insurers receive payment from Dirigo Health or
  • Providers receive commercial reimbursement rates
    for all Dirigo members
  • Extend Health Premium Assistance
  • Current MaineCare eligibility expanded to higher
    income people
  • Provide Workers and Families With Choice
  • Adds option of receiving same assistance through
    qualified private insurers

(No Transcript)
Dirigo will expand access to coverage with a
focus on
  • Small Businesses (an eligible business means a
    business with at least 2 but not more than 50
    workers including municipalities w/ 2 - 50
  • Self-employed (includes sole proprietorships)
  • Individuals Without Access to Job-based Coverage
    (from an Eligible Business)
  • Dirigo Health Board may include large public or
    private employers in the future

Criteria for Voluntary Participation by Small
  • At least 75 participation of eligible employees
    working at least 30 hrs./wk. with no other
  • Eligible employee is an employee of an eligible
    business who works at least 20 hrs./wk. but does
    not include temps or subs or employees working 26
    or fewer wks. per yr.
  • 60 ceiling on employers contribution toward
    combined premium for full-time worker
  • Employer share is prorated for part-time workers
    who work 20 or more hrs./wk. but less than
    full-time status.

Individual Eligibility for Dirigo Health
  • Individuals without access to job-based coverage
    from an eligible employer (i.e., 2 - 50
  • Dirigo Health Board may prohibit coverage to an
    individual whose current employer dropped
    coverage within past 12 months
  • Self-employed individuals
  • Unemployed individuals qualify for coverage
  • Exceptions may be established by Dirigo Health

Benefit Package
  • Not provided in statute Dirigo Board decides
  • Governors May 5, 2003 materials described
    benefit package as follows
  • Comprehensive
  • No lifetime maximum
  • Low deductibles (estimated at 250 - 500)
  • Out-of-pocket maximums 1250/individual and
  • Preventive coverage includes wellness care,
    nutrition counseling, smoking cessation, wellness
    education, cardiac rehab and routine vision
  • Dental and eyeglasses are not covered, but may be

Dirigo Health Ends Premium Lockout
  • Unlike traditional private insurance, Dirigo
    Health allows eligible employees and individuals
    at certain income levels to pay on a sliding
    scale basis and receive full coverage
  • Dirigo Health provides sliding scale subsidies
    for those individuals with household incomes
    between 200 - 300 FPL
  • 200 FPL 30,528/yr. for a family of 3
  • 300 FPL means 45,780/yr. for a family of 3
  • Enables individuals to contribute toward their
  • MaineCare (Medicaid) remains available to cover
    adults without children and disabled persons to
    125 FPL and parents and children to 200 FPL

DH May Contribute to Coverage of Individuals
Working For Large Employers
  • Dirigo Health may provide subsidies for the
    purchase of employer sponsored coverage paid by
    the employee after the first year of operation
  • The employee who works for an employer with
    greater than 50 workers may qualify if s/he
  • Is not eligible for MaineCare
  • Has a household income below 300 FPL (family of
    3 45,780)
  • These subsidies would offset the employees
    contribution in order to participate in the large
    employers plan

Dirigo Health Gives Individuals Small
Businesses Coverage Choices
  • Insurers will continue to offer individual and
    small group products
  • Dirigo Health is simply one more option for
    individuals and small businesses to buy
  • May enable small businesses to provide better
    coverage at a lower cost

Cost Containment is part of Dirigo Health
  • One-year moratorium on new CON projects
    (Executive Order, May 1, 2003) but allows CON
    projects already in pipeline on May 1st to go
    through usual review
  • Sets a statewide Capital Investment Fund that
    limits capital expenditures and equipment
    purchases on an annual basis
  • Extends CON to ambulatory surgical centers for
    capital expenses greater than 2.4 million and
    equipment costs greater than 1.2 million
  • Reduces uncompensated care costs
  • Asks hospitals to put a voluntary 3 limit on
    operating margins and 3.5 on cost increases
    (begins 9/13/03)
  • Asks doctors and health care practitioners to
    voluntarily limit their net revenue to 3 (begins
  • Asks health insurance carriers to put a voluntary
    3 limit on underwriting gains (begins 9/13/03)
  • Requires electronic claims submission by 2005 w/
    loans and assistance to providers

Funding Sources
  • 53 million in federal fiscal relief in year one
  • Voluntary contributions (individuals and small
  • Federal matching dollars for MaineCare eligibles
  • In year two and subsequent years, 4 savings
    offset payment (SOP) on health carriers,
    excess loss carriers and third party
    administrators to recover a portion of their
    premiums currently devoted to uncompensated care
    and use it to provide subsidies under DHI
  • SOP is commensurate with savings achieved under
    Dirigo Health SOP is capped at 4

Provider Reimbursement Rates
  • Market rates
  • Dirigo Health contracts with private health
    carriers that will administer claims and pay
    private market rates to health care providers

Quality Improvement
  • Maine Quality Forum (within Dirigo Health)
    coordinates data and quality initiatives
  • Four primary functions
  • Collect/disseminate evidence-based research
  • Provide consumers with useable information to
    compare provider performance
  • Consumer education to promote informed decisions
    and healthy lifestyles and
  • Technology assessments to inform CON and State
    Health Plan.

State Health Plan
  • Established by Governors Office
  • Requires an annual statewide health expenditure
    budget report to set priorities within the SHP
  • Biannual State Health Plan - required report to
    the public that assesses progress toward meeting
    SHP goals
  • Sets a statewide limit on CON spending
  • Addresses major cost drivers major threats to
    public health and safety
  • Strategies to address major cost drivers and
    public health goals
  • Annual Public Health Report - required

Price Disclosure
  • Provide consumers with information about price
    and quality
  • Requires publication of lists of average charge
    and disclosure of accepted payments at hospitals
    and physicians and other providers offices
  • Focus on commonly performed services

Commission to Study Maine Community Hospitals
  • 9 person commission appointed by Governor
  • Report and legislation by Nov. 1, 2004
  • Collect and evaluate data regarding statewide
    hospital spending, funding mechanisms and
  • Study facility and equipment needs, financing
    options and capital needs
  • Study roles of community hospitals in relation to
    other providers develops a blueprint for the
    future of Maines hospitals

Strengthens Oversight of Insurance Costs
  • Extends rate review process that is now applied
    to individual products to small group products
  • Increases accountability to the public
  • Makes rate information available to the public
  • Standardizes carrier definitions of profit and
    underwriting gains
  • Requires large group carriers to file actuarial
    certification with rate filings
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