EDITORIAL:

Dirigo Health court ruling not a policy endorsement

Copyright © 2006 Blethen Maine Newspapers Inc.

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The Superior Court ruling regarding the state's Dirigo Health program is not so much an endorsement of the program as it is an affirmation of the rules that guide it.

Gov. Baldacci and other backers of the state initiative were understandably pleased that the court upheld the method of funding Dirigo Health. But the ruling was not a judgment as to whether the funding mechanism is a good idea. The judge said simply that the state followed the process set out in law.

Justice Ronald Cole said that Insurance Superintendent Alessandro Iuppa was within his authority when he said that Dirigo had saved the state's health care system $44 million in its first year. That determination allows the state to place an assessment on private insurance premiums to recover that amount.

That money, in turn, is to be used to chip away at the roughly 130,000 Mainers without health insurance. To date, the new insurance product created under the program, called DirigoChoice, has provided coverage to about 15,000 people, though not all of them were previously uninsured.

Trade groups representing employers and private health insurance carriers had challenged Iuppa's determination, arguing that the system savings were not proved. They may have a point. Given the complexity of health care finance, it's hard to imagine that system savings can be identified with a great deal of accuracy.

But the judge said there was a reasonable basis for Iuppa's judgment and that the law gives him the authority to interpret the facts and decide on a number. That seems a fair reading of the Dirigo statute, but it doesn't mean that the funding mechanism is sound policy.

In fact, it's not. Because the system savings are so hard to define, the insurers and employers can never know for sure if the assessment they're paying is merely money they'd have spent anyway or an additional tax on health insurance premiums.

Also, this method for financing doesn't spread the burden of funding Dirigo Health evenly across all consumers of health care and their insurers.

There are other ways to go about this. A straightforward tax could be placed on the fees charged by hospitals and other providers, for instance, spreading the burden more evenly.

Baldacci has appointed a panel to look at the funding mechanism and other aspects of Dirigo and report back with recommended changes.

That's a good idea, and the first thing the Blue Ribbon Commission on Dirigo Health should do is scrap its flawed funding mechanism.