Health Reform in Maine: DirigoChoice

The plan's centerpiece was an insurance premium subsidy program, called DirigoChoice, which offered more affordable insurance options to small businesses, subsidized premiums for families with low to moderate income, and expanded Medicaid eligibility to low-income parents of dependent children.

Mathematica evaluated the program's first two years to measure its effects on small employers, low income families, and public and private payers. Research questions included:

• How many uninsured people in low- and moderate-income families gained coverage as a result of DirigoChoice?
• Were small employers more likely to offer coverage to their workers as a result of DirigoChoice?
• How sustainable was the program’s financing?
• To what degree was the Dirigo approach to reform replicable in other states?

The final report found that as of September 2006, about 15,000 people had ever enrolled in DirigoChoice, the subsidized insurance product, and 5,000 had enrolled in Medicaid as newly eligible low-income parents. Although DirigoChoice premium subsidies targeted those most in need—two thirds of individual members had income below 150 percent of poverty—the initiatives had enrolled less than 10 percent of uninsured residents. To finance the program, Maine created a system to measure estimated savings in the overall health care system as a result of cost controls. Total savings were insufficient to pay for expanded enrollment in Dirigo programs, however, because fewer small firm workers and higher-income individuals enrolled in the program than expected, which increased premium costs to the state.