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• State Health Policy

Health Reform in Maine: DirigoChoice

Through its Dirigo Health reform plan, Maine ought to make quality, affordable health coverage available to every resident by 2009, while at the same time slowing the growth of health costs. The plan's centerpiece was an insurance subsidy program, DirigoChoice, which offered affordable health insurance to small businesses and to families with low to moderate income.

Mathematica evaluated the program's first two years to measure the effects of the insurance subsidy on low- to moderate-income individuals, small employers, and public and private payers. The evaluation assessed the sustainability and replicability of the state's financing strategy for broadening coverage through both DirigoChoice and expanded Medicaid eligibility. The project was looking to answer the following questions:

• Were lower-wage workers and their families more likely to sign up for insurance as a result of DirigoChoice?
• Were small employers more likely to offer coverage as a result of DirigoChoice?
• How was the financing mechanism working, and to what degree is the Dirigo approach to reform replicable in other states?

The final report noted that since enacting comprehensive health care reform in 2003, Maine's Dirigo Health program helped expand coverage for low- and moderate-income individuals. By September 2006, about 16,100 individuals were enrolled in two coverage initiatives: DirigoChoice, the subsidized insurance product, and a Medicaid eligibility expansion for low-income parents of dependent children. While these programs were making health coverage more affordable to low-income individuals, small firms and sole proprietors, with subsidies targeting those most in need, by late 2006 the initiatives had enrolled less than 10 percent of previously uninsured residents. To pay for this expanded coverage, Maine utilized savings in the overall health care system due to lower uncompensated care and cost controls. However, the funds raised were insufficient to pay for greater subsidized enrollment in Dirigo programs, leading to a search for other financing sources to sustain the program.

Publications

"Leading the Way? Maine's Initial Experience in Expanding Coverage Through Dirigo Health Reforms" (December 2007) Overview