Dirigo Bill Passes Committee with Huge Tax Increase

Dirigo Bill Passes Committee with Huge Tax Increase

March 21, 2008 Posted by Tarren Bragdon - 1 Comment

Legislative Democrats are praising the party-line vote of the Insurance and Financial Services Committee to pass LD 2247, Representative Hannah Pingree’s Dirigo Health bill. The bill contains a $40+ million tobacco tax increase, a permanent 1.8% claims tax on all health benefits in Maine and do-nothing “reforms” to the individual insurance market.
Despite the flurry of legislative rhetoric to the contrary, the fact remains that Dirigo Health is a costly failure.
Dirigo Health had three stated goals when introduced by Gov. Baldacci in 2003:
1. Cover the all 128,000 uninsured (in 2003) by 2009
2. Be self-supporting with no new taxes or state funds (beyond first year)
3. Stabilize health insurance premiums and healthcare cost increases
Dirigo Health is failing in each area:
• Maine currently has 122,000 uninsured, according the US Census Bureau– a nominal change from the 128,000 in 2003.
• According to Mathematica, only 31 percent of DirigoChoice enrollees are uninsured. Less than 1 in 3. That means of the 14,405 enrolled in Dirigo in January, just 4,466 were previously uninsured.
• DirigoChoice cost the Maine taxpayers $2,964 per enrollee in subsidies and administrative costs for 2007. That’s a cost per uninsured of $9,561.
• Dirigo Health has consumed $53 million in federal budget relief funds PLUS another $110.8 million in Savings Offset Payment/Dirigo Tax monies – $163.8 million so far. Maine families and businesses have had their health insurance costs increased by $110.8 million over the last three years for the Dirigo Health experiment.
The Dirigo experiment has failed. Maine families should not be permanently punished with higher taxes as politicians seek to throw good money after bad.