A Series of Unfortunate Events: Dirigo – Maine’s “Public Option” Is a Costly Failure

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Read the full report | Passed in 2003, Maine’s Dirigo Health initiative was lauded as the first state-based universal coverage program this decade. Governor John Baldacci promised that Dirigo Health would (1) provide coverage for all of Maine’s 128,000 uninsured by 2009; (2) not require any new taxes; (3) be paid for by savings created in the health care system in Maine; and (4) reduce health insurance and health care costs for all.

The core element of the Dirigo Health initiative was the DirigoChoice “public option” insurance product – designed by state government, administered by a private insurer, subsidized by state tax dollars, and mainly marketed by state government to Maine small businesses and individuals. What has been the result?

• Dirigo Health has cost taxpayers $155 million over five years in subsidies and administrative costs alone.

• Today, DirigoChoice covers just 3,400 uninsured (less than 3 percent of Maine’s uninsured population).

• Incredibly, the DirigoChoice premiums for sole proprietors and individuals have skyrocketed 74% in 4 years (4 times faster than the Maine State Employees health plan (17%) and 7 times faster than inflation (10%)).