The Maine Problem

Outside of the federally funded medical services provided by the VA, Medicaid, Medicare (among others), there are some state-based ones. Massachusetts and Tennessee both have had them/still have them. I hadn’t realized that Maine was playing with one too:

The state created a “public option” known as DirigoChoice. (Dirigo is the state motto, meaning “I Lead.”) This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan’s original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be “paid for by savings in the health-care system.” This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.


Since the early 1990s Maine has required insurers to adhere to community rating and guaranteed issue, which requires that insurers cover anyone who applies, regardless of their health condition and at a uniform premium. These rules—which are in the Obama plan—have relentlessly driven up insurance costs in Maine, especially for healthy people.

The Maine Heritage Policy Center, which has tracked the plan closely, points out that largely because of these insurance rules, a healthy male in Maine who is 30 and single pays a monthly premium of $762 in the individual market; next door in New Hampshire he pays $222 a month. The Granite State doesn’t have community rating and guaranteed issue.

Yet another piece of history that we ignore to our peril.

2 thoughts on “The Maine Problem

  1. …but then there’s San Francisco (yes, that’s part of America, too), where a public option coupled with an employer mandate has “passed the market test, while not crowding out private options.” The vast majority of employers turning to the public option are not dropping private coverage but adopting coverage where there previously was none. “The positive changes in San Francisco provide a glimpse of what the future might look like if Washington passes substantial health reform this year” — and that’s written in part by William Dow, a GWBush Admin. economist.

    [William H. Dow, Arindrajit Dube, and Carrie Hoverman Colla, “A Public Option That Works,” New York Times, 2009.08.21]

  2. CAH,

    Medicare is already a “public option” of sorts for a particular demographic nationally. The last time I checked, the program was to run out of funds in just under 8 more years. Hmm.

    Oh, and San Fransisco is looking at a budget shortfall in the neighborhood of half a billion dollars this year. After all, the funding for those health care subsidies has to come from somewhere–and San Fransisco can’t print money. One wonders, since it isn’t that old, where there program will be in a few more years.

    Folks who don’t want to participate (either as employers or employees) in the SF program may still leave the city and find a place more to their liking. In the event that we would have a federal program, there would be no place to go where the taxes/penalties were not already there.

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