Maine’s “public option” has failed
October 26th, 2009 | by Brian Schwartz |From the Wall Street Journal:
First the legislature greatly expanded MaineCare, the state’s Medicaid program. Today Maine families with incomes of up to $44,000 a year are eligible; 22% of the population is now in Medicaid, roughly twice the national average.
… the state created a “public option” known as DirigoChoice. … This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. …
About two-thirds of those who enrolled already had insurance … the number of uninsured in the state today is only slightly lower that in 2004 when the program began.
Why did this happen? Among the biggest reasons is a severe adverse selection problem: The sickest, most expensive patients crowded into DirigoChoice, unbalancing its insurance pool and raising costs. That made it unattractive for healthier and lower-risk enrollees. And as a result, few low-income Mainers have been able to afford the premiums, even at subsidized rates. …
…since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue …
…largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn’t have community rating and guaranteed issue. …
… Last year, DirigoCare was so desperate for cash that the legislature broke its original promise of no tax hikes and proposed an infusion of funds through a beer, wine and soda tax, similar to what has been floated to pay for the Obama plan.
…out of fiscal necessity, the state has now capped the enrollment in the program and allowed no new entrants. Now there is a waiting list.
Read the whole article: No Maine Miracle Cure: Another state ‘public option’ that failed.
tags: Maine, Obama Care, public option
