Maine OKs Nation’s First Universal Health Plan

The Maine Legislature on Friday approved the nation’s first health plan that provides medical care for all state residents.

“This is probably as explicit and inclusive a health-care program as you can get,” said Arthur Levin, director of the nonprofit Center for Medical Consumers in New York. “It is saying, ‘We want to cover everybody in our state, one way or another.’ ”

The plan creates an independent executive agency called Dirigo Health, which will work with private insurers to guarantee health coverage by 2009 to all Maine residents who cannot afford insurance.

An aide to Gov. John E. Baldacci, a first-term Democrat who made the promise of universal health care a central piece of his campaign platform, said the governor will sign the bill next week. The program could be operating within 90 days, said the aide, Lee Umphrey.

The bold move to expand health coverage in Maine -- a notoriously poor state -- comes at a time when many cash-strapped states are talking about paring back medical coverage, or are struggling to hold on to what they have.

Maine lawmakers earlier endorsed a landmark prescription program that requires drug companies to provide bulk discounts on medication for the elderly, the working poor and some low-income residents.

Drug companies won an initial court challenge to that effort, known as Maine Rx, but the U.S. Supreme Court last month upheld Maine’s right to enact the plan.

“They really seem to be pushing the envelope in Maine,” said Levin, whose think tank studies health-care policy and advocates for consumers.

With no national health-care policy in place, Levin said, “Maybe this will have to be done state by state.”

The measure in Maine comes as the U.S. Senate prepares to debate legislation next week to provide prescription drug coverage for millions of Medicare recipients. House Republicans have proposed a similar bill.

In addition to expanding Medicaid to encompass more subscribers in Maine, the new Dirigo Health system is aimed at those who cannot afford high-deductible premiums under current health policies. Among Maine’s 1.2 million residents, about 189,000 cannot afford health coverage.

Architects of the plan hope to provide insurance for at least 31,000 people within the first year of operation, expanding to 189,000 by 2009, said Umphrey, the governor’s spokesman.

Opponents in Maine, such as Republican state Sen. Kenneth Blais, called the program “fiscally irresponsible.”

Premiums will vary depending on income levels and employment status. Dirigo Health Insurance will be available to individuals, small businesses and the self-employed.

The plan -- named for the state motto Dirigo, the Latin term for “I lead” -- also seeks to rein in medical costs by establishing voluntary price caps for providers, hospitals and insurers.

The legislation includes the creation of a state-run health watchdog group called the Maine Quality Forum. The agency will gather and disseminate information about health-care costs and quality, and will encourage the use of technology in health care.

Although the plan does not call for a general tax increase, some funding will come from a tax on insurance companies. The effort also will rely on $50 million in federal funds, as well as $80 million that the state will save by cutting down on non-reimbursed medical expenses accrued by the uninsured.

The program cobbles funds from so many sources that health-care analyst Levin called it a “Rube Goldberg” approach to health care.

“What makes it interesting and certainly promising in design is this mix of public and private money up front -- the fee from insurers, the role that the employers are to play and then mixing that in with the Medicaid money,” said Donna Folkemer, health-care program manager for the National Conference of State Legislatures in Washington.

Also intriguing, Folkemer said, is Maine’s establishment of Dirigo Health as a semipublic agency to help companies and individuals purchase insurance.

“The notion is that if you get together a larger pool of people and a larger amount of money, you can buy insurance at better rates and in a better way -- again, kind of pulling things together up front,” she said.

Levin said the measure could be hard to reproduce in larger states.

“It is always easier to do things in a small state,” he said. “And while there is not unanimity on all this in Maine, politically it is feasible to do something that is cutting-edge in such a small state. It is not so feasible in many other states.”

The legislation won approval from 105 members of the 151-person House of Representatives. The state Senate voted 25-8 in favor of the bill. Both bodies have Democratic majorities.

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Associated Press contributed to this report.