An Act To Establish a Cooperative Approach to Health Care Coverage
Maine Legislature, Session 122, LD 1545
Committee: Insurance and Financial Services
Sponsors: DAIGLE, ANNIS, MARLEY, MARRACHE, PINEAU, PINGREE, WOODBURY, MILLS
Amends: 22 MRSA §3174-D, 24-A MRSA §6902, 24-A MRSA §6903, 24-A MRSA §6908, 24-A MRSA §6910, 24-A MRSA §69, 24-A MRSA §6912-A, 24-A MRSA §6913, 24 MRSA §2327, 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2736-C, 24-A MRSA §2839-B, 24-A MRSA §6951

Legislative Document 
No. 1545 
H.P.1086 
House of Representatives, April 4, 2005 
An Act To Establish a Cooperative Approach to Health Care 
Coverage 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative DAIGLE of Arundel. 
!7l~ 
1?7.71/P£~ 
MILLICENT M. MacFARLAND 
Clerk 
Cosponsored by Representatives: ANNIS of Dover-Foxcroft, MARLEY of Portland, 
MARRACHE of Waterville, PINEAU of Jay, PINGREE of North Haven, WOODBURY of 
Yarmouth, Senator: MILLS of Somerset. 
Printed on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 22 MRSA §3174-DD, as enacted by PL 2003, c. 469, 
Pt. A, §6, is amended to read: 
§3174-DD. Dirigo health coverage 
The department Rlay ~ 
contract with one or more health 
insurance 
carriers 
to 
purchase 
Dirigo 
Health 
Insurance 
for 
MaineCare members 
wH9-~1f.--t-&--eRE9~l--t;.h-~--t-he-i-£--eRlp~9yeEs 
p~Es~aR~-~e-~~-t~~~r-see~ieR-e91Q7-~~~~~~~,-pa~~~h--R. 
A MaineCare member who enrolls in a Dirigo Health Insurance plan 
as-a-~-~-~~~yeF-~E9~F receives full MaineCare benefits 
through Dirigo Health Insurance. 
The benefits 
are delivered 
through 
~He--empl-&y-e-£~-et1--hea-J...t-h--FlaR Dirigo Health InsuranG.e., 
subject to nominal cost sharing as permitted by 42 United States 
Code, Section 13960(2003) and additional coverage provided under 
contract by the department. 
Sec. A-2. 24-A MRSA §6902. as enacted by PL 2003, c. 469, 
Pt. A, §8, is amended to read: 
§6902. Dirigo Health established; declaration of necessity 
Dirigo Health is established as 
an independent executive 
agency to arrange for the provision of comprehensive, affordable 
health care coverage to eligible 
sfRall--empl-&y-e-£-s-,--i-nG-1ud-1nq--~He 
selt-eRlF19yee7-~ae4-£--empl~~~p&RGeRt;.sr-aBe individuals on 
a 
voluntary 
basis. 
Dirigo 
Health 
is 
also 
responsible 
for 
monitoring and 
improving the quality of health care in this 
State. 
The exercise by Dirigo Health of the powers conferred by 
this chapter must be deemed and held to be the performance of 
essential governmental functions. 
Sec. A-3. 24-A MRSA §6903. sub-§§5, 6 and 7, as enacted by PL 
2003, c. 469, Pt. A, §8, are repealed. 
Sec. A-4. 24-A MRSA §6903, sub-§7-A is enacted to read: 
7-A. 
Eligi.bl.e 
iDdiv~al. 
"Eligible individual" means an 
individual who is a resident of this State. 
Sec. A-5. 24-A MRSA §6903, sub-§§8 and 12, as enacted by PL 
2003, c. 469, Pt. A, §8, are repealed. 
Sec. A-6. 24-A MRSA §6903, sub-§13, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
Page l-LROOI6(1) 
.. 
13. 
individual 
Insurance 
eligible 
MaineCare. 
enrollee" 
means 
an eligible 
who enrolls in Dirigo Health 
"Plan enrollee" includes an 
is 
eligible 
to 
enroll 
in 
Plan enrollee. 
"Plan 
eF--e~i~i9~e-~p~eyee 
through Dirigo Health. 
effipleyee 
individual 
who 
Sec. A-7. 24-A MRSA §6903, sub-§19, as enacted by PL 2003, c. 
469, Pt. A, §8, is repealed. 
Sec. A-8. 24-A MRSA §6908, sub-§l, 1rA, as enacted by PL 2003, 
c. 469, Pt. A, §8, is amended to read: 
A. 
Take any legal actions necessary eF-pFepeF-te-FeeeveF-eF 
eelleet-~~-eiiset-~~-aye-~i£~-Wealta-~--taat 
aFe-AeeessaFY for the proper administration of Dirigo Health; 
Sec. A-9. 24-A MRSA §6908, sub-§2, 1rB, as enacted by PL 2003, 
c. 469, Pt. A, §8, is repealed. 
Sec. A-IO. 24-A MRSA §6908, sub-§2, 1rE, as enacted by PL 2003, 
c. 469, Pt. A, §8, is amended to read: 
E. 
Arrange the provision of Dirigo Health Insurance benefit 
coverage 
to eligible 
individuals 
aAa--eli~i91e--effipleyees 
through contracts with one or more qualified bidders; 
Sec. A-H. 24-A MRSA §6910, sub-§l, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
1. 
Diriqo Health Insurance. 
Dirigo Health shall arrange 
for 
the provision of health benefits coverage through Dirigo 
Health Insurance not later than October 1, 2004. 
Coverage must 
be 
provided 
through 
Dirigo 
Health 
Insurance 
to 
eligible 
individuals 
not 
later 
than 
January 
L 
2006. 
Dirigo 
Health 
Insurance must comply with all relevant requirements of this 
Title. 
Dirigo 
Health 
Insurance 
may 
be 
offered 
by 
health 
insurance 
carriers 
that 
apply 
to 
the 
board 
and 
meet 
qualifications 
described 
in this 
section 
and 
any 
additional 
qualifications set by the board. 
Sec. A-12. 24-A MRSA §6910, sub-§3, 1rA, as enacted by PL 2003, 
c. 469, Pt. A, §a, is amended to read: 
A. 
Provide the comprehensive health services and benefits 
as determined by the board, 
including a 
standard benefit 
package that 
ffieets--t-be---£e~~i-£eme~~-6--~F---manda-t-EMl--eeveifa~e 
ieif--&~ei~ie-~~~-~~~r-~~~~-~~-6e~-6e-6--aBa--~eif 
eeiftaiA-p-£eviae-£6-~~-~~~~~~~-~~~-64-aRQ-tais 
~i~~e is 
compatible 
with 
an 
individual 
health 
savings 
account as authorized und~r federal law and any supplemental 
benefits the board wishes to make available; and 
Sec. A-13. 24-A MRSA §6910, sub-§4, ,A, as enacted by PL 2003, 
c. 469, Pt. A, §8, is amended to read: 
A. 
Dirigo 
Health 
may 
contract 
with 
health 
insurance 
carriers licensed to sell health insurance in this State or 
other private or public ~RiFQ-paF~Y 3rd-party administrators 
to provide Dirigo Health Insurance. 
In addition: 
(1) 
Dirigo Health shall issue requests for proposals 
from health insurance carriers; 
(2) 
Dirigo Health may 
include quality improvement, 
disease 
prevention, 
disease 
management 
and 
cost-containment 
prOVl.Sl.ons 
in 
the 
contracts 
with 
participating heal th insurance carriers or may arrange 
for the provision of such services through contracts 
with other entities; 
{6+--~~~~-Wea~~R-~~~-Fe~~iFe-~~-~ipat-~-Rea~~R 
i&S~Fa&ee-ea~F4eF6-~~~~~-~~~~-~~&-iaeR~iea*-~e 
PiFi!9-~~~-~~~--~9F--wAieA-~-~~~~-Wea~~R 
s~ssiQies-~~-~~~~--iR--~Ae-~~~-~~~--~Fe~p 
ffiaFke~t 
(4) 
Dirigo Health shall make payments to participating 
health 
insurance 
carriers 
under 
a 
Dirigo 
Health 
Insurance contract to provide Dirigo Health Insurance 
benefits to plan enrollees not enrolled in MaineCare; 
(5) 
Dirigo 
Health 
may 
set 
allowable 
rates 
for 
administration and underwriting gains for Dirigo Health 
Insurance; 
{9+--PiFi~e-~~~~~~i&t~~-e~R~iR~a~i~R-seReEi~s 
EeF-eJ4~4BJe-~~~~¥~~~~~~-~~~~I~~~~~~-~-eF-ffieFe 
effip~eyees-~~~-p~FeAaSeQ-~~~-~r~-eeyeFa~e 
~RFe~~A--~~~~-~~~--~eF--~Re--~~~~-~~--~AeiF 
e~i~isi~i~y-~~~-~F-€e~~~R~a~~eR-~-~~-p~Fs~aR~ 
~e----~~---~~~~---~~~~~---GffiR~B~6----~~Q~e~ 
ReeeRei~ia~ieR-A€~7-P~~~€-~~~,-~~~~-&r-PFiya~e 
Wea~~R-*Rs~FaRee-beyeFa~eT-See~ieRs-199gl-~e-~ggg~t-aRQ 
(7) 
Dirigo 
administer the 
1986, 
Section 
Health 
may 
administer 
or 
contract 
to 
United States Internal Revenue Code of 
plans for effipleyeFs--and--effiJ§'Jeyees 
'II 
• 
.. 
individuals participating in Dirigo Health, 
medical expense 
reimbursement accounts 
and 
care reimbursement accountsT ~ 
including 
dependent 
(8) 
Dirigo Health 
sha1.~inister or contract to 
administer 
individual 
health 
savings 
accounts 
for 
individuals participating in Dirigo Health. 
Sec. A-14. 24-A MRSA §6910, sub-§4, "B and C, as enacted by 
PL 2003, c. 469, Pt. A, §8, are repealed. 
Sec. A-IS. 24-A MRSA §6910, sub-§4"D is enacted to read: 
D. 
Dirigo 
Health 
may 
not 
establish 
an 
out-of-pocket 
maximwn, including deductibles, copayments and coinsurance, 
that exceeds 10% of an individual's adjusted gross income. 
Sec. A-16. 24-A MRSA §6910, sub-§S, "A and B, as enacted by 
PL 2003, c. 469, Pt. A, §8, are amended to read: 
A. 
Dirigo Health shall publicize the availability of Dirigo 
Health Insurance to 
B~s~ReSSeSy--Se~'-effip~eyee individuals 
aRe-e~HeFs eligible to enroll in Dirigo Health Insurance. 
B. 
Dirigo Health shall screen all eligible individuals aRe 
effip;J,eyees for eligibility for 
sYBs~ei:es-~--&eG-t;-i-on--9916 
aRe-e~~~~B~;J,~~y enrollee hardship funds under section 6912-A 
QJ;: for MaineCare. 
To facilitate the screening and referral 
process, Dirigo Health shall provide a single application 
form 
for 
Dirigo 
Health 
and 
MaineCare. 
The 
application 
materials 
must 
inform 
applicants 
of 
subsidies 
available 
through 
Dirigo 
Health 
and 
of 
the 
additional 
coverage 
available through MaineCare. 
It must allow an applicant to 
choose on the application form to apply or not to apply for 
MaineCare or for 
a-~YB6~ey enrollee hardship funds. It must 
allow 
an 
applicant 
to 
provide 
household 
financial 
information necessary to determine eligibility for MaineCare 
or 
a--sYBsiey enrollee hardship 
fund~. 
Except 
when 
the 
applicant has declined to apply for MaineCare or 
a-~.yl>~.,iey 
enrollee hardship funds, an application must be treated as 
an application for Dirigo Health, for 
a-~&si:ey enrollee 
hardship funds and for MaineCare. 
MaineCare ffiYS~ ~ 
make 
the final determination of eligibility for MaineCare . 
Sec. A-I7. 24-A MRSA §69I2, as enacted by PL 2003, c. 469, 
Pt. A, §8, is repealed. 
Sec. A-IS. 24-A MRSA §6912-A is enacted to read: 
§6912-A. 
Enrollee Hardship Fund 
Dirigo Health shall establish the Enrollee Hardship Fund to 
provide financial assistance to eligible individuals for whom the 
payment 
of 
the 
out of pocket 
maximum, 
including 
required 
deductibles, copayments and coinsurance, is a hardship based on 
income. 
Dirigo He_~~.hal~dopt rules for incQ!.lle eligibility 
of eligible individuals, the amount of the financial assistance 
available and the application process for individuals. 
Sec. A-19. 24-A MRSA §6913, as enacted by PL 2003, c. 469, 
Pt. A, §8, is repealed. 
Sec. A-20. 24-A MRSA §§6914 and 6915, as enacted by PL 2003, 
c. 469, Pt. A, §8, are amended to read: 
§6914. Intraqovernmental transfer 
Starting July 1, 2004, Dirigo Health shall transfer funds, 
as necessary, to a special dedicated, nonlapsing revenue account 
administered by the agency of State Government that administers 
MaineCare for the purpose of providing a state match for federal 
Medicaid dollars. Dirigo Health shall annually set the amount of 
contribution. 
~Re-~~~~~-~-~~-iBel~Qe-ffie£ey-~~~~-&&-a 
saviB~s-pay~eB~-e~~se~-p~~s~aB~-~e-see~ieB-99~6T 
§6915. Diriqo Health Fund 
The Dirigo Health Fund is created as to finance coverage 
under Dirigo Health. 
The 
fund is 
a 
dedicated fund 
for 
the 
deposi t 
of any funds advanced for initial operating expenses, 
payments made by employers and individuals, any 
saviB~5--G-I-I-&e~ 
pay~eB~S-~-P1:u.&1*a-B-1;.-~e-~,i.().n..-9916 funds received from the 
State Tax Assessor pursuant to Title 36, section 2831 and any 
funds received from any public or private source. 
The fund may 
not lapse, but must be carried forward to carry out the purposes 
of this chapter. 
Expenditures from the fund are authorized for 
~yments tQ........P..artic.l.pating_~aJ;:x.te..rs for Dirigo Health 
Insuran.G_~:tL 
payments for the administration of Dirigo Health and payments 
from the Enrollee Hardship Fund created under section 6912-A. 
Sec. A-21. 36 MRSA c. 370-A is enacted to read: 
CBAP'TER 370-A 
INDIVIDUAL HEALTH ASSESSMENT 
§2831. 
AsseSsment on wages and earnings 
1. 
Assessment levied. 
Beginning ,January 1, 
2006, 
every 
re.~j.dent 
individual 
in 
this 
State 
and 
every 
nonresident 
individual subject to Maine income tax liability under this Title 
shall pay an assessment of 5% on that individual's adjusted gross 
income up to $150,000 and an assessment of 1% on that portion of 
adjusted gross income that exceeds $150,000. 
2. 
PAfment 
of 
assessment: 
returns. 
Every 
individual 
$ubject to the assessment imposed by this section shalL on or 
before April 15th, file with the assessor on forms prescribe~ 
the assessor a return for the prior calendar year. 
At the time. 
of 
filing 
such 
a 
return, 
each individual shall 
pay to the 
assessor the amount of assessment shown due. 
3. 
Diri.9~LJ!~~~ 
The 
assessor 
shall 
pay 
collected 
under 
this 
section 
to 
the 
Dirigo 
Health 
established in Title 24-8, section 6915. 
ta1'_e.§. 
Fund 
4. 
Ezemption. 
An 
individual 
who 
demonstrates 
to 
the 
.s.at_l...Qf_~ation 
o~tbi!--.a$Si!s.s.o.+~.QAcLt.\.Sj..Y_e 
evidence 
th..a.L-th.e. 
individual has obtained a basic catastrophic policy and is not 
~nrolled in Dirigo Health Insurance as permitted under Title 
24-A, section 6910 is exempt from paying the assessment required 
in subsection 1. 
PARTB 
Sec. B-1. 24 MRSA §2327, as amended by PL 2003, c. 469, Pt. 
E, §l, is further amended to read: 
§2327. Group rates 
A 
group 
health care 
contract 
may 
not 
be 
issued 
by 
a 
nonprofit hospital or medical service organization in this State 
until a copy of the group rates to be used in calculating the 
premium for 
these contracts has 
been filed for 
informational 
purposes with the superintendent. 
The filing must include the 
base rates and a description of any procedures to be used to 
adjust the base rates to reflect factors 
includingL 
but not 
limited tOL 
age, gender, health status, claims experience, group 
si ze and coverage of dependents. 
Notwithstanding this section, 
rates 
for 
group 
Medicare 
supplement, 
nursing 
home 
care 
or 
long-term care contracts and for certain group contracts included 
within the definition of "individual health plan" in Title 24-A, 
section 
2736-C, 
subsection 
1, 
paragraph 
C must 
be 
filed in 
accordance with section 2321 
aJ'le--i"-at.-e-&--fe-£--sma-],.],.-~·H}Up--aea;l,t;a 
p;l,aJ'ls-~-~~-9y-~i~Je-~~-~~-6gQg-~-~£~-~-~~1-&G-iJ'l 
aeesFeaJ'lee-wita-taat-seetisJ'l. 
Sec. 8-2. 24-A MRSA §2736, sub-§3. ~8, as amended by PL 2003, 
c. 469, Pt. E, §9, is further amended to read: 
B. 
The 
insurer 
must 
demonstrate 
in 
accordance 
with 
generally 
accepted 
actuarial 
principles 
and 
practices 
consistently applied that, as of a date no more than 210 
days prior to the filing, the ratios of benefits incurred to 
premiums earned for those products average no less than 80% 
for the previous l2-month period. 
~e~-~~€-~~~~-~Ris 
eale~la~ieRT-~-~a¥4B~~-~~~~~-~~~--~aiQ-~~-~e 
see~ieR-991a-ffi~s~-ge-~Fea~ee-as-iRe~FFee-elaiffisT 
Sec. B-3. 24-A MRSA §2736, sub-§4, ~C, as amended by PL 2003, 
c. 469, Pt. E, §10, is further amended to read: 
C. 
In any hearing conducted under this subsection, 
the 
Bureau of Insurance and any party asserting that the rates 
are excessive have the burden of establishing that the rates 
are 
excessive. 
The 
burden 
of 
proving 
that 
rates 
are 
adequateT .and not unfairly discriminatory 
aRe-..,i-n---GGffi~J:.iaBee 
wi~a--E-ae---~i-r"'€fflent-6--~---6e€~.,iEHl.--9916 remains 
with 
the 
insurer. 
Sec. 8-4. 24-A MRSA §2736-A, first~. as amended by PL 2003, c. 
469, Pt. E, §ll, is further amended to read: 
If at any time the superintendent has reason to believe that 
a 
filing 
does 
not 
meet 
the 
requirements 
that 
rates 
not 
be 
excessive, 
inadequate T 
~ unfairly discriminatory 
e~--Re~--iR 
eeffi!,liaRee--w.,i-t.-h--seG-~~-99l:a or that the filing violates any of 
the provisions of chapter 23, the superintendent shall cause a 
hearing to be held. 
Sec. B-5. 24-A MRSA §2736-C, sub-§2, ~D, as amended by PL 
2001, c. 410, Pt. A, §2 and affected by §10, is repealed. 
Sec. 8-6. 24-A MRSA §2736-C, sub-§2, V, as enacted by 
PL 
2003, c. 469, Pt. E, §12, is amended to read: 
F. 
A carrier that adjusts its rate shall account for the 
savings 
offset 
payment 
or 
any 
recovery 
in 
that offset 
payment in its experience consistent with this section aRe 
see~ieR-99l:6. 
Sec. B-7. 24-A MRSA §2736-C, sub-§5, as amended by PL 2003, c. 
469, Pt. E, §13, is further amended to read: 
5. 
Loss ratios. 
For all policies and certificates issued 
on 
or 
after 
the 
effective 
date 
of 
this 
section, 
the 
superintendent shall disapprove any premium rates filed by any 
carrier, whether initial or revised, for an individual health 
policy unless it is anticipated that the aggregate benefits 
estimated to be paid under all the individual health policies 
maintained in force by the carrier for the period for which 
coverage is to be provided will return to policyholders at least 
65% of the aggregate premiums collected for those policies, as 
determined in accordance wi th accepted actuar ial principles and 
practices and on the basis of incurred claims experience and 
earned premiums. 
¥9F--&he-~~-~--~~~-€~~€~~a~i9B7--aBy 
saviB~s-~~~-pay~eB~s-~~-p~~~~~B~--~-~~~~~-~~k~-~--ge 
tFea&eQ-as-iBeYFFeQ-e~ai~sT 
Sec. B-8. 24-A MRSA §2839-B, as enacted by PL 2003, c. 469, 
Pt. E, §17, is repealed. 
PARTC 
Sec. C-l. 24-A MRSA §6903, sub-§3, as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
3. 
Dependent. 
"Dependent" means 
a 
spouse, 
an unmarried 
child under 19 years of age, a child who is a student under 23 
years of age and is financially dependent upon a plan enrollee or 
a person of any age who is the child of a plan enrollee and is 
disabled and dependent upon that plan enrollee. "Dependent" may 
include 
a 
domestic 
partner 
consistent with 
sections 
d14~-AT 
2832-A and 4249 and Title 24, section 23l9-A. 
Sec. C-2. 24-A MRSA §6951, first" as enacted by PL 2003, c. 
469, Pt. A, §8, is amended to read: 
The Maine Quality Forum, referred to in this subchapter as 
"the forum," is established within Dirigo Health. 
The forum is 
governed by the board with advice from the Maine Quality Forum 
Advisory Council pursuant to section 6952. 
~l:!.e--~{H'-OO~·-ffiU.S.t.--ge 
~HRQeaT-~-Jea6t--~-pa~~7--&a~~a-~~-&a~i~&-~~~-pay~eRts 
~aae--P-1*~&1*aR-&--t-{)--~e€~.,it>-fl--&9~~T Except as provided in section 
6907, subsection 2, information obtained by the forum is a public 
record as provided by Title 1, chapter 13, subchapter 1. 
The 
forum shall perform the following duties. 
SUMMARY 
This bill does the following: 
Part A expands the Dirigo Health Insurance program to all 
residents of this State starting January 1, 
2006. 
The bill 
requires that the Board of Directors of Dirigo Health develop a 
benefit 
package 
compatible 
with 
federally 
authorized 
health 
savings accounts and provide the opportunity for health savings 
accounts for all eligible individuals. 
The bill also limits the 
out-of-pocket 
maximums, 
including deductibles, 
copayments 
and 
coinsurance, under the Dirigo Health Insurance program to 10% of 
an 
eligible 
individual's 
adjusted 
gross 
income. 
The 
bill 
requires Dirigo Health to establish the Enrollee Hardship Fund to 
provide financial assistance to eligible individuals to meet any 
required out-of-pocket maximums under the Dirigo Health Insurance 
program. 
Financing for coverage under 
the Dirigo Health Insurance 
program is provided through 
an 
individual health assessment. 
Beginning 
January 
1, 
2006, 
each 
resident 
individual 
and 
nonresident individual subject to income tax liability must pay 
an individual health assessment of 
5Olo for the first $150,000 of 
that individual's adjusted gross income and an additional lOlo of 
any portion of that adjusted gross income that exceeds $150,000 
unless the individual has other coverage through at least a basic 
catastrophic policy and is not enrolled in Dirigo Health. 
The 
bill repeals the provision in current law relating to savings 
offset payments by health insurers and 3rd-party administrators. 
Part B and Part C correct cross-references necessitated by 
changes in this bill.