An Act To Modify the Savings Offset Payment for Plan Year 2006 and To Establish the Blue Ribbon Coamission on the Long-term Funding of the Dirigo Health Program Further amend the bill by striking out everything after the title and before the summary and inserting in its place the following: , Be it enacted by the People of the State of Maine as follows: PART A Sec. A-I. 24-A MRSA §2736-C, sub-§2, 1fF, 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 and section 6913. For any rate filing made by a carrier on or after August 1, 2006, the carrier shall certify in the filing that the carrier has not included profit from any savings realized by the carrier that were the result of the operation of Dirigo Health and any increased MaineCare enrollment due to an expansion in MaineCare eligibility occurring after June 30, 2004 and that the carrier has used Page l-LR2809(2) ~-COMMITTEE AMENDMENT
Maine Legislature, Session 122, LD 1935
Committee Amendment CA_A_S655 (Senate)
Amends: 24-A MRSA §2736-C

COMMITTEE AMENDMENT 'A" to S.P. 736, L.D. 1935, Bill, "An 
Act To Protect Health Insurance Consumers" 
Amend the bill by striking out the title and substituting 
the following: 
'An Act To Modify the Savings Offset Payment for Plan Year 2006 
and To Establish the Blue Ribbon Coamission on the Long-term 
Funding of the Dirigo Health Program' 
Further amend the bill by striking out everything after the 
title and before the summary and inserting in its place the 
following: 
, Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2736-C, sub-§2, 1fF, 
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 and 
section 6913. 
For any rate filing made by a carrier on or 
after August 1, 
2006, 
the carrier shall certify in the 
filing that the carrier has not included profit from any 
savings realized by the carrier that were the result of the 
operation of Dirigo Health 
and 
any 
increased MaineCare 
enrollment due to an expansion in MaineCare eligibility 
occurring after June 30, 2004 and that the carrier has used 
Page l-LR2809(2) 
~-
COMMITTEE AMENDMENT 
",,-
, .X:""'_.~ 
.-
'",,: 
COMMITTEE AMENDMENT .. A 
.. to S.P. 736, L.D. 1935 
its best efforts to limit the impact of the savings offset 
payment 
on 
rates 
in 
accordance 
with 
sound 
actuarial 
principles. 
Sec. A-2. 24·A MRSA §2808·B, sub·§2-B, ,D, as enacted by PL 
2003, c. 469, Pt. E, §16, is amended to read: 
D. 
A carrier that adjusts its rate shall account for the 
savings offset payment or any recovery of that savings 
offset 
payment 
in its 
experience 
consistent with 
this 
section and section 6913. 
For any rate filing made by a 
carri~r on or after August 1, 
2006, 
the carrier shall 
certify in the filing that the carrier has not included 
profit from any savings realized by the carrier that were 
the 
result Qf 
the 
Qperation of Dirigo 
Health 
and 
any 
increased MaineCare 
enrQllment 
due 
to 
an 
expansion 
in 
MaineCare eligibility Qccurring after June 30, 2004 and that 
the carrier has used its best efforts to limit the impact of 
the savings offset payment on rates in accordance with sound 
actuarial principles. 
Sec. A·3. 24·A MRSA §2839·B, sub·§2, as enacted by PL 2003, c. 
469, Pt. E, §17, is amended to read: 
2. 
Annual filing. 
Every carrier offering group health 
insurance specified in subsection 1 shall annually file with the 
superintendent on or before April 30th a certification signed by 
a member in good standing of the American Academy of Actuaries or 
a successor organization that the carrier's rating methods and 
practices are in accordance with generally accepted actuarial 
principles 
and 
with 
the 
applicable 
actuarial 
standards 
of 
practice as promulgated by an actuarial standards board. 
The 
filing must also certify that the carrier has included in its 
experience any savings offset payments or 
recovery of those 
savings offset payments consistent with- section 6913. 
For any 
filing under this subsection made by a carrier on or after August 
1, 2006, the carrier shall certify in the filing that the carrier 
has not included profit from any savings realized by the carrier 
that were the result of the operation of Dirigo Health and any 
increased MaineCare enrollment due to an expansion in MaineCare 
eligibility Qccurring after June 30, 2004 and that the carrier 
has used its best efforts to limit the impact of the savings 
offset payment 
on 
rates in accordance 
with 
sound actuarial 
principles. 
The 
filing 
also 
must 
state 
the 
number 
of 
policyholders, certificate holders 
and dependents, 
as 
of the 
close of the preceding calendar year, enrolled in large group 
health insurance plans offered by the carrier. A filing and 
supporting information are public records except as provided by 
Title 1, section 402, subsection 3. 
COMMITTEE AMENDMENT 
:,.:;7:i;l 
''0.< 
~." 
COMMITTEE AMENDMENT 'J4" to S.P. 736, L.D. 1935 
Sec. A·4. Reduced savings offset payment for plan years beginning on 
or after January 1, 2006 to December 31, 2006. Notwithstanding the 
Maine Revised Statutes, Title 24-11., section 6913, subsection 3, 
the Board of Directors of Dirigo Health shall reduce the savings 
offset payment determined by the board pursuant to that section 
for claims paid for plan years beginning on or after January 1, 
2006 to December 31, 2006 to a percentage of claims paid for plan 
years beginning on or after January 1, 2006 to December 31, 2006 
that does not exceed 4% of paid claims or exceed a total of 
$23,000,000 
for 
all 
health 
insurance 
carriers, 
3rd-party 
administrators and employee benefit excess insurance carriers. 
The savings offset payment determined by the board pursuant to 
this 
section must 
be 
paid in 
accordance with the 
schedule 
established in Title 24-11., section 6913, subsection 3, paragraph 
F. 
No later than 90 days after the effective date of this Act, 
all health insurance carriers shall file amended rate filings 
with the Superintendent of Insurance demonstrating the effect of 
the reduced savings offset payment pursuant to this section on 
premium rates 
and attesting that carrier has 
used its best 
efforts to ensure that rates reflect the reduced savings offset 
payment. The maximum savings offset payment set forth in this 
section applies retroactively to any savings offset payment that 
has been assessed and paid pursuant to Title 24-11., section 6913 
for plan years beginning on or after January 1, '2006. 
No later 
than 30 days following the effective date of this Act, Dirigo 
Health shall issue 
refunds of, 
or credits for, 
any 
amounts 
collected in excess 
of 
the 
limitations established in this 
section. This section applies only to the savings offset payment 
determined by the board pursuant to Title 24-11., section 6913 for 
claims paid for plan years beginning on or after January 1, 2006 
to December 31, 
2006. 
This section may not be construed as 
repealing, amending or modifying in any way the provisions of 
Title 24-11., section 6913 for plan years beginning on or after 
January 1, 2007. 
Sec. A·S. Final settlement of experience modification payment. 
Dirigo Health shall renegotiate with the carrier contracted to 
underwrite and provide Dirigo Health Program coverage for the 
purpose of reducing the 2006 experience modification payment by 
$11,000,000. 
Sec. A·6. Reduced administrative costs. 
Dirigo Health shall 
achieve savings of $1,900,000 for fiscal year 2006-07 through 
reductions in administrative expenses. 
PARTB 
COMMITTEE AMENDMENT 
," 
'~- ',,:" 
',', 
" 
;.~ 
COMMITTEE AMENDMENT .. A, to S.P. 736, L.D. 1935 
Sec. B·l. Commission established. The Blue Ribbon Commission on 
the Long-term Funding of the Dirigo Health Program, referred to 
in this Part as "the commission," is established. 
Sec. B·2. Membership. The commission consists of 15 members 
appointed as follows: 
1. Two members of the Senate appointed by the President of 
the 
Senate 
and 
members 
of 
the 
House 
of 
Representatives 
appointed by the Speaker of the House. At least one legislative 
member appointed must be a member of the Joint Standing Committee 
on Insurance and Financial Services and at least one legislative 
member appointed must be a member of the Joint Standing Committee 
on Appropriations and Financial Affairs. Legislative appointments 
under this subsection must be representative of the bipartisan 
interests of the Legislature; 
2. Three members appointed by the President of the Senate, 
one member representing the interests-of employers recommended by 
a statewide organization of business and employer members, one 
member representing hospitals recommended by a statewide hospital 
association and one member .representing insurance producers: 
3. Three members appointed by the Speaker of the House of 
Representatives, 
one 
member 
representing 
health 
insurance 
carr iers recommended by a statewide association of health plans, 
one member representing physicians recommended by a 
statewide 
medical 
association and 
one member 
representing the Medicaid 
Advisory Committee; and 
4. 
Five 
members 
appointed 
by 
the 
Governor, 
one 
member 
representing the Governor's Office of Health Policy and Finance, 
one member representing the Board of Directors of Dirigo Health, 
one member representing organized labor, one member representing 
a 
statewide health care advocacy organization and one member 
representing a statewide consumer advocacy organization. 
Sec. B·3. Chairs. 
The first-named Senator is the Senate chair 
of the commission and the first-named member of the House is the 
House chair of the commission. 
Sec. B·4. Appointments. All appointments must be made no later 
than 
days following the effective date of this Act. 
The 
appointing authorities shall notify the Executive Director of the 
Legislative Council 
upon making their appointments. 
When 
the 
appointment of all members is complete, the chairs shall call and 
convene the first meeting of the commission no later than August 
1st. 
COMMITTEE AMENDMENT 
.1"?". 
<;->-~.~~~~ ' .. 
{ ,\:' 
'.e ... It 
2.2 
COMMITTEE AMENDMENT ,A .. to S.P. 736, L.D. 1935 
Sec. B·5. Duties. 
The commission shall study the Dirigo Health 
Program 
and 
make 
recommendations 
for 
a 
long-term 
funding 
mechanism in an effort to ensure its sustainabi1ity over time. In 
conducting the study, the commission shall: 
1. 
Review and make 
recommendations for alternatives for 
funding the Dirigo Health Program and subsidies under the program 
in 
a 
fair, 
equitable 
and 
broadly 
distributed 
manner. 
The 
recommendations must include a number of funding sources and may 
include the savings offset payment in some manner; 
2. 
Evaluate the MaineCare expansion in the Dirigo Health 
reform law, 
including its funding source, 
enrollment of 
the 
uninsured 
and 
the 
potential 
impact 
on 
private 
payors 
and 
providers; 
3. 
Review and make recommendations for reforms that may 
improve the affordability of health insurance in the individual 
market; 
4. 
Review and make 
recommendations 
on cost 
methods proven effective in reducing and controlling 
costs and health care spending or creating savings 
health care market; and 
containment 
health care 
in Maine's 
5. 
Review alternatives for funding sources within existing 
resources to maximize federal Medicaid matching funds for the 
purpose of reimbursing medical providers for unpaid claims or to 
adjust rates. 
Sec. B·6. Meetings. The commission is authorized to meet at 
least 4 times in 2006 and with approval of the presiding officers 
of the Legislature may hold additional meetings and may meet at 
various locations throughout the State. Meetings must be open to 
the 
public. 
The 
commission 
shall 
consult 
stakeholders 
for 
information .and assistance in gathering information related to 
the duties described in section 5. 
Sec. B·7. Staff assistance. 
Upon approval of the Legislative 
Council, the Office of Policy and Legal Analysis and the Office 
of Fiscal and Program Review shall provide staffing assistance to 
the commission. 
Sec. B-S. Compensation. Legislative members are entitled to 
receive the legislative per diem and reimbursement of necessary 
expenses 
for their attendance at authorized meetings of the 
commission. 
Public members not otherwise compensated by their 
employers or other entities that they represent are enti tIed to 
receive reimbursement of necessary expenses and a per diem equal 
to the legislative per diem for their attendance at authorized 
COMMITTEE AMENDMENT 
·-,-
~; 
" 
COMMITTEE AMENDMENT A" to S.P. 736, L.D. 1935 
meetings 
of 
the 
commission. 
The 
Executive 
Director 
of 
the 
Legislative Council shall administer the commission's budget. 
Sec. B·9. Budget. 
The 
chairs 
of 
the 
commission, 
with 
assistance 
from 
the 
commission 
staff, 
shall 
administer 
the 
commission's budget. 
Wi thin 10 days after its first meeting, 
the commission shall present a work plan and proposed budget to 
the Legislative Council for its approval. The commission may not 
incur expenses that would result in the commission exceeding its 
approved budget. Upon request from the commission, the Executive 
Director of the Legislative Council shall promptly provide the 
commission 
chairs 
and 
staff 
with 
a 
status 
report 
on 
the 
commission's budget, expenditures incurred and paid and available 
funds. 
Sec. B·I0. Receipt of outside funds authorized. The commission may 
seek outside funds to fund costs of the commission other than 
authorized per diem and expenses of the members authorized by 
section 8. Contributions to support the work of the commission 
may not be accepted from any party having a pecuniary or other 
vested interest in the outcome of the matters being studied. Any 
person, other than a state agency, desiring to make a financial 
or in-kind contribution must certify to the Legislative Council 
that it has no pecuniary o.r other vested interest in the outcome 
. of the study. 
The certification must be 
made in the manner 
prescribed by the Legislative Council. 
All contributions are 
subject 
to 
approval 
by 
the 
Legislative 
Council. 
All 
funds 
accepted must be forwarded to the Executive Director of the 
Legislative Council along with an accounting record that includes 
the amount of the funds, the date the funds were received, from 
whom the funds were received and the purpose of or any limitation 
on 
the 
use 
of 
the 
funds. 
The 
Executive 
Director 
of 
the 
Legislative Council shall administer any funds received by the 
commission. 
Sec. B·ll. Reports. 
No 
later than November 1, 
2006, 
the 
commission 
shall 
submit 
a 
report 
with 
findings 
and 
recommendations, 
including 
any 
suggested 
legislation, 
for 
presentation to the joint standing committee of the Legislature 
having jurisdiction over insurance and financial services matters 
and 
the 
joint standing 
committee of 
the 
Legislature having 
jurisdiction over appropriations and financial affairs. The joint 
standing committee of the Legislature having jurisdiction over 
insurance and financial services matters and the joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
appropriations 
and 
financial 
affairs 
may 
each 
report 
out 
legislation to the l23rd Legislature based on the commission's 
report. 
If the commission fails to recommend legislation, the 
joint standing committee of the Legislature having jurisdiction 
over insurance and financial services matters shall report out 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to S.P. 736, L.D. 1935 
legislation to the 123rd Legislature to address the impact of the 
savings offset payment on health insurance premium rates. 
Sec. B-12. Appropriations 
and 
allocations. 
appropriations and allocations are made. 
DIRIGO HEALTH 
Dirigo Health Fund 0988 
The 
following 
Ini tiati ve: 
Deallocates funds to be achieved by a $1. 9 million 
reduction in Dirigo Health administrative expenses and an $11 
million reduction in contracted Dirigo Health Program experience 
modification payments. 
DIRIGO HEALTH ENTERPRISE FtJBD 
2005-06 
2006-01 
Unallocated 
$0 
($12,900,000) 
DIRIGO HEALTH ENTERPRISE FUND TOTAL 
$0 
($12,900,000) 
DIRlGO HEALTH 
DEPARTMENT '1'O'.rALS 
2005-06 
2006-01 
DIRIGO HEALTH ENTERPRISE FtJBD 
$0 
($12,900,000) 
DEPAR'l"MENT "J."OTAL -
ALL FtJBDS 
$0 
($12,900,000) 
LEGISLATURE 
Study Commissions -
Funding 
0444 
Initiative: 
Provides funds for the per diem and expenses of the 
Blue Ribbon Commission on the Long-term Funding of the Dirigo 
Health Program. 
GENERAL FURD 
Personal Services 
All Other 
GENERAL FUND TOTAL 
Study Commissions -
Funding 
0444 
2005-06 
$0 
$0 
$0 
2006-01 
$880 
$5,250 
$6,130 
Initiative: 
Provides a base allocation of $500 in fiscal year 
2006-07 in the event that outside funding is received to support 
the work of the Blue Ribbon Commission on the Long-term Funding 
of the Dirigo Health Program. 
OTHER SPECIAL REVENUE FONDS 
All Other 
2005-06 
$0 
2006-07 
$500 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT 'A It to S.P. 736, L.D. 1935 
OTHER SPECIAL REVENUE FUNDS TOTAL 
$0 
$500 
LEGISLATURE 
DEPAR"lMENT "l'OrALS 
2005-06 
2006-07 
GENERAL FUND 
OTIIER SPECIAL REVENUE FUNDS 
DEPAR"lMENT "l'OrAL -
ALL FUNDS 
SECTION "l.'OTALS 
GENERAL FUND 
OTIIER SPECIAL REVENUE FUNDS 
DIRIGO HEALTH ENTERPRISE FUND 
SECTION "l.'OTAL -
ALL FUNDS 
SUMMARY 
$0 
$0 
$0 
2005-06 
$6,130 
$500 
$6,630 
2006-07 
$0 
$6,130 
$0 
$500 
$0 
($12,900,000) 
$0 ($12,893,370)' 
This amendment is the majority report of the committee and 
replaces the bill. 
Part A does the following. 
1. 
It requires carriers to certify that the carrier has not 
included profit from any savings realized by the carrier that 
were 
the result of 
the operation of Dirigo Health and 
any 
increased MaineCare enrollment due to an expansion in MaineCare 
eligibility and to use their best efforts to limit the impact of 
the savings offset payment on rates. 
2. 
It reduces the savings offset payment for plan year 2006 
to $23,000,000. 
3. 
It requires 
Dirigo Health to 
renegotiate with the 
carrier contracted to underwrite the Dirigo Health Program for 
the purpose of reducing the 2006 experience modification payment 
by $11,000,000. 
4. 
It requires Dirigo Health to achieve savings of $1.9 
million in administrative costs. 
Part B creates the Blue Ribbon Commission on the Long-term 
Funding of the Dirigo Health Program to study the Dirigo Health 
Program and make recommendations on a long-term funding mechanism 
in an effort to ensure its sustainability. It is the intent of 
the Legislature that the commission recommend a long-term funding 
mechanism to replace the savings offset payment as the sole 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A" to S.P. 736, L.D. 1935 
source of funding subsidies for the Dirigo Health Program. 
The 
commission is required to submit a report by November 1, 2006 to 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over insurance and financial services matters and 
the 
joint 
standing 
committee 
of 
the 
Legislature 
having 
jurisdiction over appropriations and financial affairs. The joint 
standing committee of the Legislature having jurisdiction over 
insurance 
and 
financial 
services 
matters 
shall 
report 
out 
legislation to address the impact of the savings offset payment 
on health insurance premium rates. 
The 
amendment 
removes 
the 
emergency 
preamble 
and 
the 
emergency clause from the bill. 
The amendment also adds an appropriations and allocations 
section. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Approved: 04/28/06 ~ae 
LD 1935 
LR2809(02) 
An Act To Protect Health Insurance Consumers 
Fiscal Note for Bill as Amended by Committee Amendment 'A" 
Committee: Insurance and Financial Services 
Fiscal Note Required: Yes 
Majority Report 
Fiscal Note 
Current Costs - Legislative Study 
2005-06 
2006-07 
Projections 
2007-08 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Other Special Revenue Funds 
Other Funds 
Revenue 
Other Funds 
Legislative Study 
$0 
$6,130 
$0 
$6,130 
$0 
$500 
$0 
($12,900,000) 
$0 
($20,700,000) 
The projected costs to fund the general operating expenses of the Blue Ribbon Commission on the 
Long-term Funding of the Dirigo Health Program are $6,130 in fiscal year 2006-07. Since the 
Legislature's budget includes $20,000 in fiscal year 2006-07 for legislative studies and the Council 
has already committed this amount, a General Fund appropriation to the Legislature of $6,130 in 
fiscal year 2006-07 for this study has been included in this amendment. There is also a base 
$0 
$0 
$0 
$0 
$0 
• allocation of $500 in fiscal year 2006-07 in the event that outside funding is received to support the 
work of the commission. 
Fiscal Detail and Notes 
Projections 
2008-09 
$0 
$0 
$0 
$0 
$0 
Assumes the bill's decrease in the 2006 savings offset payment (SOP) would reduce Dirigo Health Program revenue by 
$20,700,000 for fiscal year 2006-07. Includes a FY 2006-07 deallocation of $12.9 million to be achieved by savings 
of $1.9 million in Dirigo Health Agency administrative costs and an $11.0 million reduction in contracted Dirigo 
Health Program experience modification payments. While these deallocations do not fully offset the reduction in 
revenue, the program does have existing authority to keep program spending within available resources. Any 
additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation resulting from 
the bill can be absorbed by the Bureau utilizing existing budgetary resources. 
LR2809(2) - Fiscal Note - Page 1 of 1 
)