An Act To Establish a Single-payor Health Care System
Maine Legislature, Session 122, LD 0130
Committee: Insurance and Financial Services
Sponsors: TWOMEY
Amends: 2 MRSA §6-F, 36 MRSA §4365

Legislative Document 
No. 130 
H.P.106 
House of Representati ves, January 11, 2005 
An Act To Establish a Single-payor Health Care System 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative TWOMEY of Biddeford. 
11/~ 
/J7.1l/ac~ 
MILLICENT M. MacFARLAND 
Clerk 
Under suspension of the rules, cosponsored by Senator MARTIN of Aroostook and 
Representatives: ADAMS of Portland, ASH of Belfast, BURNS of Berwick, CAIN of Orono, 
CANA VAN of Waterville, FAIRCLOTH of Bangor, GERZOFSKY of Brunswick, HOGAN of 
Old Orchard Beach, HUTTON of Bowdoinham, KOFFMAN of Bar Harbor, O'BRIEN of 
Lewiston, PARADIS of Frenchville, PATRICK of Rumford, PELLETIER-SIMPSON of 
Auburn, PERCY of Phippsburg, PINEAU of Jay, PINGREE of North Haven, RINES of 
Wiscasset, SAMPSON of Auburn, SMITH of Van Buren, WALCOTT of Lewiston, 
WHEELER of Kittery, Senators: COWGER of Kennebec, STRIMLING of Cumberland. 
Prinled on recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A·I. 22 MRSA c.I06 'is enacted to read: 
CHAPTER 106 
ACCESS 'l'O AFFORDABLE HEALTH CARE 
SUBCHAPTER 1 
GENERAL PROVISIQNS 
§371. 
Definitions 
As 
used 
in this 
chapter~nless the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. Agenc,y. 
"Agency" 
means 
the Maine Health Care Agency 
established by section 375. 
2. Council. 
"Council" means the Maine Health Care Council 
established by section 377. 
3. 
Fund. 
"Fund" means the Maine Health Care Trust Fund 
established by section 374, subsection 1. 
4. 
Global 
budget. 
"Global 
budget" 
means 
a 
statewide 
aggregate amount budgeted for the provision of all health care 
services or for any sector of health care services. 
5. Qpen plan. 
"Open plan" means the benefit delivery system 
for the Maine Health Care Plan that is open to all plan members 
and all participating providers, as specified in rules adopted 
pursuant to section 372, subsection 4. 
6. Organized delivery system. 
"Organized delivery system" 
means an organization that provides or contracts for a 
cOl!lQlet~ 
range of health care services, 
as specified in rules adopted 
pursuant to section 372, subsection 4, paragraph A. 
7. Participating prov:.ider. 
"Participating provider" means a 
provider 
approved 
for 
the 
delivery of 
health 
care 
services 
pursuant to section 372, subsection 4 . 
4n 
."S'-'!.'------"'-P .... l ... an"""'.'--__ ' ...... ' r~l"-'a""l""l_"_--'I_"_np""-_~a."_'n'_'='_s . 
the 
Ma i ne 
HealtlJ 
established by section 372. 
Page l-LR0241(1) 
9. Provider. 
"Provider" means 
any person, organization, 
corporation or association that prQvides health care services and 
is authorized to provide those services under the laws of this 
State. 
"Proyider" includes persons 
and entities that provide 
healing, treatment and care for those relying on a 
recognized 
religious method of healing as provided for in the federal Social 
Security Act, Title XVIII and permitted under state law. 
10. 
Resident. 
"Resident" means a person who resides within 
the State as def ined by rules adopted by the agency pursuant to 
section 376, subsection 1. 
11. 
Small Business Hardship Fund. 
"Small Business Hardship 
Fund" 
means 
the 
fund 
created by section 374, 
subsection L 
paragraph A as part of the Maine Health Care Trust Fund. 
SUBCHAPTER 2 
ENSURING ACCESS TO HEALTH CARE 
S372. 
Maine Health Care Plan 
The 
Maine 
Health 
Care 
Plan 
is 
established 
to 
provide 
security through high guality, affordable health care for the 
people of the State. 
The plan must offer health care services 
beginning July 1, 
2006, 
and the agency shall administer 
and 
oversee the plan in accordance with this chapter. 
1. 
Goals of Maine Health Care Plan. 
The plan has the 
following goals: 
A. 
To eliminate income based disparity in the health care 
status of citizens of the State; 
B. 
To reduce the rate of growth in the cost of health care 
services; 
C. 
To reduce waste and inefficiency in the administration 
of health care services and health insurance; 
D. 
To increase access to primary and preventive health care 
services; 
E. 
To 
reduce the number of excessively expensive health 
care 
procedures 
and 
eliminate 
unnecessary 
and 
harmful 
procedures; 
F. 
To promote cooperation among communi ties and providers 
of health care l 
to elimiuatc. cC'st-acceleratina pra.:tices l 
t9 
coordinate the deli vect-
':.:1 
:::a1''2 and use at technology and 
eguipment and to increase quality and cost efficiency; 
G. 
To distribute the costs 
of health care fairly 
and 
equitably: 
H. 
To 
simplify 
the 
health 
care 
system 
for 
consumers, 
businesses and providers; 
I. 
To ensure providers clinical freedom to treat patients 
based on health care needs and criteria; and 
J. 
To ensure accountability in all aspects of the health 
care system to promote public confidence and control of 
costs. 
2. Eligibility for Maine Health Care Plan. 
In accordance 
with this suQsection, residents and nonresidents are eligible to 
receive covered health care services from participating providers 
under the plan within this State if the service is necessary or 
appropriate for the prevention, diagnosis or treatment of, or 
maintenance or rehabilitation following, 
injury, disability or 
disease. 
The 
agency shall adopt rules 
regarding payment of 
premium, application for a plan card and membership in the plan. 
Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
The 
rules must provide for at least the following. 
A. 
Each resident of the State is eligible to receive health 
care under the plan and may enroll in the plan. 
B. 
A nonresident of the State who maintains significant 
contact 
with 
the 
Stat.e, 
including 
employment 
or 
self-employment within the State or attendance at a college, 
university or other institution of higher education in the 
State, is eligible to receive health care under the plan. 
Eligibility 
extends 
to 
a 
person 
qualifying 
under 
this 
paragraph and to 
that-----P-~son' s spouse and dependents. 
The 
agency 
shall 
adopt 
rules 
establishing 
criteria 
for 
eligibility for nonresidents and determine the premium to be 
paid by them and the method of payment. 
C. 
A plan member who ceases to be eligible for the plan may 
elect, 
within 
days 
of 
the 
event 
that 
causes 
ineligibility, to continue participation in the plan for a 
period of 
up 
to 
months. 
For 
the 
purposes 
of this 
paragraph, 
a 
plan 
member 
is 
considered 
to 
have 
lost. 
eligibility 
due 
to 
disability if 
the 
member 
could 
be 
determined disabled under t.he federal Social Security AcL 
Title II 
CH 
Ti tIe XVI. 
Tho "gency shall ens')r,,:, l:hat plan 
members who become ineligible Lor enrollment ill th'c' b'lall ale 
promptly llotifi",'] or the Fl'.'.i.s.i.ollS '.If this pdldgcdyiJ. 
Tll,-::' 
agency shall adopt rules establishing the premium to be paid 
by persons eligible under this paragraph and the method of 
payment. 
D. 
To establish eligibility, each person must apply for a 
plan card, pay to the fund the premium determined applicable 
pursuant to 
section 
374, 
subsection 1, 
paragraph Band 
satisfy the 
application 
requirements 
established 
by 
the 
agency. 
3. 
Health care benefits. 
As provided in this subsection, 
the plan must provide coverage for health care services from 
participating providers within this State if those services are 
necessary 
or 
appropriate 
for 
the 
prevention, 
diagnosis 
or 
treatment of, or maintenance or rehabilitation following, injury, 
disability or disease. 
The agency shall adopt rules regarding 
provision of the following covered health care services: 
A. 
Hospital services; 
B. 
Medical and other professional services furnished by 
participating providers; 
C. 
Laboratory tests and imaging procedures; 
D. 
Home 
health 
care 
for 
persons 
requ~rJ.ng 
services 
performed by or under the 
superV~s:lOn of professional or 
technical personnel, 
including, but not limited to, 
home 
care for acute illness, personal care attendant services and 
the medical 
component of home 
care for chronic illness. 
Notwithstanding any other provision of law, the plan may use 
copayments for permanent care services; 
E. 
Rehabilitative 
services 
for 
persons 
receiving 
therapeutic care; 
F. 
Prescription drugs and devices. 
Unless the prescribing 
practitioner 
certifies 
that 
a 
more 
expensive 
drug 
is 
medically necessary, the plan may cover only part of the 
cost of a drug dispensed in a package or form of dosage or 
administration 
when 
the 
agency 
determines 
that 
a 
less 
expensive package or form of dosage or administration is 
available 
that 
is 
pharmaceutically 
equivalent 
in 
its 
therapeutic effect. 
If a plan member chooses to purchase a 
more expensive drug under this paragraph, the plan member is 
responsible for paying the amount not covered by the plan; 
G. 
Mental health services: 
H. 
Substance abuse treatment; 
I. 
Primary and acute dental services; 
J. 
Vision appliances, including lenses, frames and contact 
lenses, according to a schedule established by the agency; 
K. 
Medical 
supplies 
and 
durable 
medical 
equipment 
and 
selected assistance devices; 
L. 
Hospice care; and 
M. 
Health care services payable pursuant to Title 39-A for 
all employees whose date of injury is on or after July 1, 
2006. 
Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
4. Benefit delivery. 
Covered health care services must be 
provided to plan members by the participating providers of their 
choice through organized delivery systems or the open plan. 
The 
delivery of covered health care services to plan members 
is 
subject to the provisions of this subsection. 
The agency shall 
adopt rules regarding benefit delivery by the plan that include, 
but are not limited to, the following. 
A. 
Organized delivery systems authorized by the agency may 
provide health care services to plan members. 
B. 
The open plan is available to all plan members and to 
all participating providers. 
C. 
The plan must~~or health care services provided to 
plan members while they are out of the State. 
The plan 
member must have been out of the State temporarily for 
reasons other than to obtain the health care services, or_ 
the member must have obtained the health care services out 
of 
the 
State 
for 
cOll1pelli~9-_reason~Jelateq 
to 
the 
suitability of the services, the nature of the condition and 
personal 
circumstances. 
The 
agency 
shall establish 
and 
operate a plan to pay for health care services provided to 
plan members while they are out of the State. 
The payments 
must be made at the rates established by the agency for 
comparable services provided by the plan in the State. 
Charges 
in excess 
of 
the 
payment 
rates 
established 
in 
accordance with this paragraph are the responsibility of the 
plan member~_ 
D. 
The pIal! must paL __ ~aslLl)_~nefits to a pro-.. -ider -:)1 health 
care services or to a pIal! ·nernber fen a l-easollabie arnount 
charged 
for 
medically 
necessary, 
emergency 
health 
care 
services obtained by a plan member from a provider who is 
not a participating provider. 
E. 
Copayments or deductibles do not apply to health care 
services 
provided 
through 
the 
plan. 
except 
that. 
to 
encourage the use of the most appropriate and cost-effective 
mode of service. an organized deliyery system may reguire 
reasonable payments by a plan member if payment is approved 
by the agency and does not substantially interfere with 
access to needed health care seryices. 
F. 
Accountability to 
the public 
of 
the 
open plan and 
organized delivery systems 
must be 
ensured in order to 
promote public confidence in the health care delivery system 
and awareness of the costs of care. 
G. 
Flexible enrollment and transfer processes that preserve 
plan member confidence and ensure that health care needs are 
met must be provided. 
H. 
An 
opportunity 
for 
negotiation 
of 
fair 
rates 
of 
compensation with participating providers in the open plan 
and 
organized 
delivery 
systems 
and 
negotiation 
with 
pharmaceutical 
companies 
for 
similarly 
classified 
pharmaceuticals must be provided. 
I. 
A program to expand services to underserved rural and 
low-income communities must be established. 
J. 
Mechanisms must be developed to proyide incentives to 
participating providers in the open plan and to organized 
delivery 
systems 
for 
additional 
sayings 
that 
do 
not 
compromise the guality of health care. 
Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375. subchapter 2-A. 
5. 
Provider 
requirements. 
Participating providers. 
the 
open plan and organized delivery systems may not charge a plan 
member or a 3rd party for covered health services and may not 
charge rates in excess of the reimbursement levels set by the 
agency. 
A participating provider of health care services. the 
open plan and organized delivery systems 
may 
not 
refuse to 
provide services to a plan member on the basis of health status. 
medical condition, previous insurance status. race, color, creed, 
age. 
national 
origin, 
citizenship 
status, 
gender, 
sexual 
orientation, disabili ty, marital status or arrest rec']rd except 
as appropriate 
':C' 
the provider·,,; pr'Jfessional special i z3tion 'JI 
other medically appropriate ClrCUJ11stances. 
6. 
Provision of information by participating providers. 
A 
participating provider shall make information available to the 
agency and permit examination of its records by the agency as 
necessary for the purposes of this section and section 374. 
1. 
OrganjZed delivery system requirements. 
For fiscal year 
2006-07, organized delivery systems must have target loss ratios 
of 88% and caps on administrative costs of 10%. 
For fiscal year 
2007-08, organized delivery systems must have target loss ratios 
of 
90% 
and 
caps 
on 
administrative 
costs 
of 
8%. 
For 
each 
succeeding fiscal year, the loss ratio must increase 
lq,o and the 
administrative 
cost 
cap 
must 
decrease 
1% 
until 
the 
agency 
determines that the greatest efficiency has been reached. 
8. 
Role of other health care programs. 
Until the agency 
determines otherwise, the plan is supplemental to all coverage 
available to a plan member 
from another health care program, 
including, 
but not limited to, 
the Medicare 
program of 
the 
federal Social Security Act, Title XVIII: the Medicaid program of 
the federal Social Security Act. Title XIX: the Civilian Health 
and Medical Program of the Uniformed Services, 10 United States 
Code, 
Sections 
1071 to 1106; 
the federal 
Indian Health Care 
Improyement Act, 25 United States Code, Sections 1601 to 1682; 
the 
statewide 
plan provided 
through 
Dirigo 
Health 
Insurance 
pursuant to Title 24-A, chapter 87; other 3rd-party payors who 
may be billable for health care services; and any state and local 
health care programs, 
including, but not limited to, workers' 
compensation 
and 
employers' 
liability insurance, 
pursuant 
to 
former Title 39 and Title 39-A. 
Health care services billed to 
3rd party payors other than the plan must be paid for by those 
programs, and coverage under the plan is supplemental to that 
coverage. 
A plan member who receives health care services under 
another health care program or from a 3rd party payor to which 
the plan is supplemental shall pay a 
premium to the fund in 
proportion to the health care benefits available to the plan 
member under the plan. 
SUBCHAPTER 3 
ElfSURIBG THE OUALITY« AFf"ORDABILITY AND 
Ef"f"ICIElfCY Of" HEALTH CARE 
§313. 
Quality; affordability; efficiency; health 
planning 
The agency shall undertake the following duties to ensure 
the quality, affordabili ty ( ett i-::iencv 
and plannina 
,t 
heal til 
care for the citizens of the State. 
1. 
assurance 
program. 
technical 
A. 
The 
Ouality of care. 
The agency shall establish a quality 
program 
and 
~all adopt 
rules 
to 
implement 
that 
Rules adopted pursuant to this subsection are routine 
rules as defined in Title 5, chapter 375, subchapter 
program must include, but is not limited to: 
A. 
Operation of the plan; 
B. 
Use of covered health care services of participating and 
nonparticipating providersj 
C. 
Evaluation of the performance of participating providers; 
D. 
Standards and continuity of care: 
E. 
A plan for increased delivery of preventive and primary 
care: 
F. 
Access to information and data for the agency; 
G. 
A plan to ensure that the open plan and organized 
delivery systems address public health needs; 
H. 
Plan member involvement in policy decisions: and 
I. 
An 
efficient 
complain~solution process 
regarding 
quality of care and utilization and rate controls. 
2. 
Affordability of care. 
The agency shall establish an 
affordability 
assurance 
program 
and 
shall 
adopt 
rules 
to 
implement 
that 
Pt"QgJ;am. 
Rules 
adopted 
pursuant 
to 
this 
subsection are routine technical rules as defined in Ti tIe 5, 
chapter 375, subchapter 2-A. 
The program must include, but is 
not limited to: 
A. 
Rates of compensation for participating providers in 
organized delivery systems and in the open plan; 
B. 
Operation of the Small Business Hardship Fund to assist 
employers for which the plan constitutes a hardship: 
C. 
Maintenance of a prescription drug formulary: and 
D. 
Cost 
contai~~~~anisms for 
organized 
deliver~ 
systems and for the open plan. 
Cost containment mechanisms 
may 
include 
primary 
care 
case 
management, 
guaranteed 
provider 
paymenh ___ 'lariable 
reimbursement 
rates 
for 
providers ( leview of treatment and services concur rent wi th 
the 
provisi_QJL...Q~b~ __ t-'!:~j;ltrnent and services ( 
e;:pendi ture 
targets, practice parameter::; alHJ treatment norlllS. 
3. 
Efficiency of care. 
The 
agency shall establish an 
efficiency-of-care program and shall adopt rules to implement 
that program. 
Rules 
adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, 
chapter 
375, 
subchapter 2-A. 
The agency shall review health care malpractice 
insurance costs and shall work with organized delivery systems, 
participating providers and insurers to ensure that the resources 
of the fund are used for maximum service delivery. 
The agency 
shall develop claims handling and data collection methods 
and 
forms, including, but not limited to, uniform billing forms and 
procedures 
to 
facilitate 
the 
exchange 
of 
information 
and 
communication between the agency and participating providers. 
4. 
Health planping. 
The agency shall establish a health 
planning program 
and 
adopt rules 
to 
implement 
that program. 
Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
Health 
planning must be considered in light of the programs on quality, 
affordability and efficiency established under subsections 1 to 
3. 
The program must include, but is not limited to: 
A. 
Global budgets for all expenditures of the plan for the 
base year of the plan and for each following year based on 
the level of expenditures in the preceding year as increased 
by the percentage of increase in the average per capita 
personal income applicable to the State, as developed by the 
United States Department of Commerce; 
B. 
Global budgets for hospitals and institutional providers 
with 
adjustments 
for 
case 
mix, 
volume 
and 
region 
and 
separate capital budgets 
for hospitals 
and institutional 
providers; 
C. 
A certificate of need program, pursuant to chapter 103-A; 
D. 
A health planning program; and 
E. 
Data collection regarding health care needs, resourceQ 
and expenditures. 
SUBCHAPTER 4 
FINANCING OF THE MAINE HEALTH CARE PLAN 
§314. 
Financing of Maine Health Care Plan 
Financing of the plan is accomplished by the fund. 
• 
1. 
Maine Ile...alth Care Tryst Fund. 
The Maine Health Care 
Trust Fund is established to finance the Rlan. 
Deposits into the 
fund and expenditures from the fund must be made pursuant to 
this 
section and to rUl~s adopted by the agency to carry out the 
purposes of this section. 
All income generated pursuant to this 
~~ust be d~ited in. the fund, which does not lapse but 
carries forward from one fiscal year to the next. 
Rules adopted 
pursuant to this section are routine technical rules as defined 
in Title 5, chapter 375, subchapter 2-A. 
'-'A'-'._-----:T"'h,.."e'------"S"-'m,."a"."l"..,l"----=B'-'u"-"'s i ne s s Ha r ds hip Fund is e stab li she d a s 
a 
part 
of 
the 
fund 
to 
assist 
self-employed 
persons 
and 
empl,Qye.rs for 
whiclLl?-QI'~ic.ipati~n in the plan constitutes a 
hardship. 
B. 
Payments are deposited into the fund from the following 
sources: 
(1) 
Premium payments made by individuals and employers 
as follOWS: 
l§l 
Premium levels for individuals must be based 
on 2 levels of income: income at or under $35,000 
per year and income over $35,000 per year; and 
Jb) 
Ass~_ssment levels for employers must be based 
on 2 levels of profitability: that measured by a 
profi t margin smaller than 10'1-0 and that measured 
by a profit margin of 10% or greater; 
(2) 
Premium 
payments 
made 
by 
residents 
and 
nonresidents based on earned income not included in 
subparagraph 1 and on unear~income; 
-,-(-->!3---,-) __ 
P"-,,,a~y,ments 
made 
by 
federal, 
state 
and 
local 
governmental units; 
il~ayments from the increase in the cigarette tax 
from 47.0 mills to 49.5 mills levied pursuant to Title 
36, 
section 4365, 
be&Lnni----illL-in fiscal year 2006-07. 
Payments frolJl the cigarette tax must be deposited iato 
the Small Business Hardship Fund. 
Only amounts not 
reguired for that fund may be transferred from that 
fund into the Maine Health Care Trust Fund; 
(5) 
Copayments for permanent care made pursuant to 
section 372, subsection 3, paragraph D; and 
C. 
Expenditures 
from 
the 
fund 
are 
authorized 
for 
the 
following purposes: 
(1) 
One pet:cent of the budget of the fund for health 
promotion and injury, disease and disability prevention 
programs: 
(2) 
Payments 
to participating providers for 
-"'c""a'-"r'-"e<-----"s'-"e'-'r'--v"-'~=_· c"'-e><-"'-s_---"'-r"'-e..,n""d""e'-"r'-"e"-'d"----/;p~u"'r"-'s"'-"'uan t 
to 
sec t ion 
subsection 4: 
health 
372, 
(3) 
Payments to nonparticipating providers for health 
care 
services 
rendered 
pursuant 
to 
section 
372, 
subsection 4i 
(4) 
Payments 
[or 
capital 
expenditures 
approved 
pursuant to chapter 103-Ai 
(5) 
Payments to the Small Business Hardship Fundi 
(6) 
Payments for administration of the fund and the 
P.1..a.nL 
(7) 
Payments for the operations and expenditures of 
the agency, 
the council and any advisory committees 
authorized by law or appointed by the agencYi and 
(8) 
Other payments made pursuant to law. 
2. 
Requirements for expenditures. 
The agency shall adopt 
rules setting the requirements for expenditures from the fund. 
Rules adopted pursuant to this subsection are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A. 
The 
agency shall perform quarterly reviews of expenditures within the 
open plan and organized delivery systems to determine whether 
expenditures 
are 
within 
the 
budget 
of 
the 
agency. 
The 
requirements include: 
A. 
For organized delivery systems, rates that are based on 
capitation, that utilize risk adjustment and that are set to 
reflect whether a region is underserved or has low income 
and utilization rates; 
B. 
For participating providers in the open plan, rates that 
are set to reflect costs, 
volume 
and relative value of 
services and that may be based on contracts and capitation; 
C. 
For institutional J2.rc·,·iclers and hospitals, 
rotes that 
are based C'll 9lobal buc1qets; .all,.l 
Page Il-LR0241(1) 
D. 
For rural health centers and the family planning system, 
rates that reflect their special mission and needs. 
SQBCBAP'.IER 5 
MAINE HEALTH CARE AGgcy 
§375. 
Establishment 
The 
Maine 
Health 
Care 
Agency 
is 
established 
as 
an 
independent executive agency to: 
1. 
Maine Health Care Plan. 
Administer and oversee the 
Maine Health Care Plan established by section 372; 
2. 
Maine 
Health 
Care 
Council. 
Take 
action 
under 
the 
direction of the Maine Health Care Council established by section 
377; and 
3. 
Maine Health Care Trust Fund. 
Administer and oversee 
the Maine Health Care Trust Fund established by section 374, 
subsection 1. 
§376. 
General povers 
In addition to the powers granted to the agency elsewhere in 
this chapter, the agency is authorized to act as necessary to 
carry out the 
purposes of 
this chapter, 
including, 
but not 
limited to, the following. 
0 " 
1. 
Rulemaking. 
The 
agency may adopt, 
amend and repeal 
rules as necessary for the proper administration and enforcement 
of this chapter, subject to the Maine Administrative Procedure 
Act. 
Rules 
adopted pursuant to this subsection are 
routine 
technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
2. 
Executive director and staff. 
The agency shall employ 
an 
executive director, 
who 
must 
have 
had experience 
in the 
organization, financing or delivery of health care and who shall 
perform the duties delegated by the 
agency. 
The 
agency may 
delegate to 
the executive director any of its functions 
and 
duties except the 
adoption of rules, 
the establishment of 
a 
global budget for health care for the State under section 373, 
subsection 
and 
the 
approval 
of 
certification 
of 
need 
applications under chapter 103-A. 
The executive director is an 
unclassified employee and serves at the pleasure of the council, 
The executive director ( at the direction of the agenr:v ( 
shell J 
hire personnel to administer this :::hapter ( subject 
t,~ the '-':i'""il 
Service Law and within the budget set by the agenc~ 
3. 
Receipt of gifts, grants and payments; fees. 
The agency 
may solicit. receive and accept gifts, grants, payments and other 
funds 
and advances 
from 
any person and enter into agreements 
with 
respect to those grants, gifts, payments and other funds 
and advances, including 
agreemen_t~_ that involve the undertaking 
of studies, plans, demonstrations and projects. 
The agency mM 
charge and retain fees to recover the reasonable costs 
incurr~Q 
in 
reproducing 
and 
distributing 
reports, 
studies 
and 
other 
publications and in responding to requests for information. 
4. 
Studies and analyses. 
The agency may conduct studies 
and analyses related to the provision of health care, health care 
costs and matters it considers appropriate. 
5. 
Grants. 
The 
agency 
may 
make 
grants 
to 
persons 
to 
support research or other activities undertaken in furtherance of 
~he purposes 
of this 
chapter. 
Without 
the 
specific written 
authorization of the agency, 
a party receiving a grant from the 
agency may not release, publish or otherwise use results of the 
research or information made available by the agency. 
6. 
Contracts. 
The 
agency 
may contract with anyone 
for 
services necessary to carry out the activities of the agency. 
Without the specific written authorization of the agency, a party 
entering into a contract with the~~may not release, 
publi~b 
or otherwise use information made available to that party under 
contracted responsibilities, 
7. 
Audits. 
To 
the 
extent 
necessary 
to 
carry out its 
responsibili ties, the agency, 
during normal business hours and 
upon reasonable notification, may audit, examine and inspect any 
records of any health care provider, organized delivery system or 
contractor. 
8. 
Data collection. 
The 
agency shall institute 
a 
data 
collection system 
to 
acquire 
and 
analyze 
information 
on 
the 
provision 
of 
health 
care 
and 
health 
care 
costs. 
All 
data 
released by the agency must protect the confidentiality of the 
health care provider and the client and. whenever possible, must 
be released as aggregate data. 
9. 
Complaint resolution. 
providers 
and 
plan 
members, 
complaint resolution system to 
care providers and plan memQ~T~, 
In cooperation with health care 
the 
agency 
shall 
institute 
a 
handle the complaints of health 
funding require·J to ':arry 0,' L '"it,::, I'La'poses of th i:.; 
':11<.',:, ':", 1,. 
Tll,,, 
agency shall submit bienniQ.)J.::::. 
,~'c the Leglslature 
L~J.J1~Q~~<;\l '\ 
Page l3-LR024l(1) 
• 
4g 
proposed budget with levels of premiums and assessments and taxes 
under Title 36, 
section 4365. 
Funding for the agency budget 
approved by the Legislature is paid from the fund. 
11. 
Coordination with federal. state and local health care 
systems. 
The agency shall institute a system to coordinate the 
activities of the 
agency and the plan with the health 
car~ 
programs of the federal, state and municipal governments. 
12. 
Reports. 
On or before January 1st of each year, the 
agency shall submit to the Governor and the Legislature a report 
of 
its operations 
and 
aCkivities 
during 
the 
previous 
year, 
including its 
operations 
and 
activity 
with 
respect 
to 
the 
funding, tax and budget requirements pursuant to subsection 10. 
This 
report 
must 
include 
facts 
and 
suggestions 
and 
policy 
recommendations 
that 
the 
agency 
considers 
necessary. 
As 
it 
determines appropriate, the agency shall publish and disseminate 
information helpful to the citizens of this State in making 
informed choices in obtaining health care, including the results 
of studies or analyses undertaken by the agency. 
13. 
Advisory cODlllittees. 
The agency may appoint advisory 
committees to advise and assist the agency. 
Members of those 
committees serve without compensation but may be reimbursed by 
the agency for necessary expenses while on official business of 
the committee. 
14. 
Headquarters. 
The agency' s central office must be in 
the Augusta area, but the agency may hold hearings and sessions 
at any place in the State. 
15. 
Seal. 
The agency may have a seal bearing the words 
"Maine Health Care Agency." 
§377. 
Maine Health Care Council 
The 
Maine 
Health 
Care 
Council 
is 
established 
as 
the 
decision-making and directing council for the agency. 
1. 
Membership. 
The 
council 
is 
composed of 
members, 
appointed 
by 
the 
Governor 
and, 
within 
days 
after 
authorization, subject to review by 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 
health 
and 
human 
services matters and to confirmation by the Legislature. 
Persons eligibl<:; [or appointment-
!-" the council must have 
11a(l 
experience in the organi<;atiolLc :leli-,iery or financiucl __ .21---.l1~_illth 
care. 
}l[ith experience in the delivery and organization of primary and 
preventive care and public nealth services. 
At least one member 
of the council must be an individual who is not a health care 
provider and has not worked for a health care provider or health 
insurer. 
Members of the council shall devote full time to their 
duties. 
2. 
Terms. 
The terms of the members are staggered. 
Of the 
initial appointees, one must be appointed for one year, one for 2 
years and one for 3 years. 
Thereafter, all appointments are for 
5-year terms, except that a member appointed to fill a vacancy in 
an unexpired term serves only for the remainder of that term. 
Members hold office until the appointment and confirmation of 
their successors. 
3. 
Chair; voting. 
The Governor shall designate one member 
of the council as chair. 
The chair shall preside at meetings of 
the council, is responsible for the expedient organization of the 
agency's work and may vote on all matters before the council. 
Two council members constitute a quorum. 
The council may take 
action only by an affirmative vote of at least 2 members. 
4. 
Duties. 
The 
council 
shall 
direct, 
administer 
and 
QErsee the agency in 
th~psu"forJTl9.11~of its duties under this 
chapter. 
The council shall annually prepare a state health plan 
in accordance with Title 2, chapter 5. 
The council has broad 
authority to carry out the purposes of this chapter. 
Sec. A-2. Working capital advance. 
The State Controller shall 
transfer a 
$400,000 working capital advance to the dedicated 
account of the Maine Health Care Trust Fund on the effective date 
of this Part. 
The Maine Health Care Agency shall repay this 
working capital advance by June 30, 2007. 
Sec. A-3. Effective date. 
This Part takes effect January 1, 
2006. 
PART B 
Sec. B-1. Maine Health Care Plan Transition Advisory Committee. 
1. 
Establishment. 
The Maine Health Care Plan Transition 
Advisory Committee is established to advise the members of the 
Maine Health Care Council as established in the Maine Revised 
Statutes, Title 22, section 377. 
2. 
Membership. 
The committee consists of 20 members, 
1,,11,., 
are appointed as specifiecl ill r.hic: subsection ancl 
ar~ .c::ubiect 
tr) 
confirmation by the Leqislatu[W 
Page l5-LR024l(1) 
.. 
Four members must be Legislators. 
Two of those members must be 
appointed by the President of the Senate, one from each of the 2 
political parties having the largest number of members in the 
Senate, and 2 must be appointed by the Speaker of the House of 
Representatives, one from each of the 2 political parties having 
the largest number of members in the House. 
Sixteen 
representatives 
of 
the 
public 
must 
be 
appointed 
as 
follows: 
members by the Governor, 4 members by the President 
of the Senate and 4 members by the Speaker of the House of 
Representatives. 
The appointing authorities shall notify the Executive Director of 
the Legislative Council 
upon making their appointments. 
All 
appointments must be made within 30 days of the effective date of 
this Part. 
Within the following 30 days, the appointments must 
be reviewed and approved by a joint committee consisting of the 
members of 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 health and human services matters and must be 
confirmed by the Legislature. 
The public members must represent statewide organizations from 
the following groups: consumers, uninsured persons, providers of 
maternal and child health services, Medicaid recipients, persons 
with disabilities, 
persons 
who 
are elderly, 
organized labor, 
allopathic and osteopathic physicians, nurses and allied health 
care 
professionals, 
organized 
delivery 
systems, 
hospitals, 
communi ty health centers, 
the family planning system and the 
business community, including a representative of small business. 
When appointment of all members of the committee is completed, 
the chair of the Legislative Council shall call the committee 
together for its first meeting. 
The first meeting must be held 
wi thin 90 days of the effective date of this Part. 
The members 
of the committee shall elect a chair from among the members. 
3. 
Responsibilities. 
The 
committee 
shall 
hold 
public 
hearings, solicit public comments and advise the Maine Health 
Care Council for the purposes of planning the transition to the 
Maine Health Care Plan and recommending legislative changes to 
accomplish the purposes of the Maine Revised Statutes, Title 22, 
chapter 106. 
4. 
Staffing and funding. 
The Maine Health Care Council 
shall provide staffiIl':1 awJ [undin':T ["I the '::'Jmmitte'? 
5. 
Compensation. 
Members of the committee serve without 
compensation. 
They are entitled to reimbursement from the Maine 
Health Care Council 
for 
travel 
and other necessary expenses 
incurred in the performance of their duties on the committee. 
6. 
Reports. 
As it determines appropriate, the committee 
shall report to the Maine Health Care Council. 
The committee 
shall report to the Governor and to the Legislature on July 1, 
2006, January 1, 2007, July 1, 2007 and December 31, 2007. 
7. 
Completion of duties. 
The committee shall complete its 
duties on December 31, 2007, when all terms of membership on the 
committee expire. 
Sec. B-2. Effective date. 
This Part takes effect January 1, 
2006. 
PARTC 
Sec. C-l. 2 MRSA §6-F is enacted to read: 
§6-f. 
Salaries of members of Maine Health Care Council 
and executive director of Maine Health Care Agency 
Notwithstanding any other provision of law, the salaries of 
members of the Maine Health Care Council, as established in Title 
22, section 377, and of certain employees of the Maine Health 
Care Agency. 
as established in Title 22. section 375. are as 
follows. 
1. 
Members, Maine Health Care Council. 
The salaries of the 
members of the Maine Health Care Council. as established in Title 
22, section 377. are within salary range 91. 
2. 
Executive director, 
Maine Health Care 
Agency. 
The 
salary of the executive director of the Maine Health Care Agency. 
as established in Title 22, section 37 5, is within salary range 
Sec. C-2. Effective date. 
This Part takes effect January 1, 
2006. 
PARTD 
Sec. D·1. 24·A MRSA §2185·A is enacted to read: 
§2185-A. 
Benefits that duplicate health care benefits of Maine 
4B 
Health Care Plan 
Health insurance policies and contracts 
and health care 
contracts and plans are subject to the following provisions. 
1. 
Prohihi..ted 
conduct. 
A 
person, 
insurer, 
health 
maintenance organization or nonprofit hospital or medical service 
organization may not sell or offer for sale in this State a 
health insurance policy or contract or a health care contract or 
plan that offers benefits that duplicate the health care benefits 
offered by 
th~Mai~Realt~Care Plan under Title 22, section 
372, subsection 3 unless. that person, insurer, health maintenance 
organization 
or 
nonprofit 
hospital 
or 
medical 
service 
organization has been authorized as an organized delivery system 
by the Maine Health Care Agency pursuant to Title 22, section 
372, 
subsection 4, 
paragraph A. 
A violation· of this section 
constitutes an unfair and deceptive trade practice under section 
~ 
2. 
Allowed con~ct. 
A person, insurer, health maintenance 
organization 
or 
nonprofit 
hospital 
or 
medical 
service 
organization may sell or offer for sale in the State a health 
insurance policy or contract or a health care contract or plan 
that offers coverage and benefits that are supplemental to and do 
not duplicate covered health care benefits offered by the Maine 
Health Care Plan under Title 22, section 372, subsection 3. 
Sec. D·2. Effective date. 
This Part takes effect July 1, 2006 
and applies to all policies, contracts and plans delivered or 
issued for delivery on or after July 1, 2006. 
For purposes of 
this section, all contracts are deemed to be renewed no later 
than the next yearly anniversary of the contract date. 
PART E 
Sec. E·1. 36 MRS A §4365, as amended by PL 2003, c. 705, §6, 
is further amended to read: 
§4365. 
Rate of tax 
A tax is imposed on all cigarettes imported into this State 
or held in this State by any person for sale at the rate of 41 
~ 
mills for each cigarette. 
Payment of the tax is evidenced 
by 
the 
affixing 
of 
stamps 
to 
the 
packages 
containing 
the 
cigarettes. 
Sec. E·2. 36 MRSA §4365·E, as enacted by PL 2001, c. 439, Pt. 
SSSS, §2, is amended to read: 
§4365-E. 
Application of cigarette tax rate increase effective 
December 1, 2005 
Page l8-LR024l(1) 
The following provisions apply to cigarettes held for resale 
on Qeteae~-lT-dggl December 1, 2005. 
1. 
Stamped rate. 
Cigarettes stamped at the rate of 'J1 47 
mills per cigarette and held for resale after Sep~emae~-'Jgr-~gQl 
November 30, 2005 are subject to tax at the rate of 41 49.5 mills 
per cigarette. 
2. 
Liability. 
A person possessing cigarettes for resale is 
liable for the difference between the tax rate of 41 49.5 mills 
per cigarette and the tax rate of 'J1 47 mills per cigarette in 
effect 
before 
Qeteaefi---±-,---6QQl 
December 
L 
2005. 
Stamps 
indicating payment of the tax imposed by this section must be 
affixed to all packages of cigarettes held for resale as of 
Qet9ae~-lT-~ggl December 1, 2005, except that cigarettes held in 
vending machines as of that date do not require that stamp. 
3. 
Vending machines. 
Notwithstanding any other provision 
of this chapter, 
it is 
presumed that all cigarette vending 
machines are filled to capacity on Qeteaefi--±-,--dggl December L 
~ 
and that the tax imposed by this section must be reported on 
that basis. 
A credit against this inventory tax must be allowed 
for cigarettes stamped at the rate of 41 49.5 mills per cigarette 
placed in vending machines before Qet:eaeF--l-,--6gg1 December 1, 
~. 
4. 
Payment. 
Payment of the tax imposed by this section 
must 
be 
made 
to the State Tax 
Assessor by JaHyafiy--lr--6Qg6 
February 
15, 
2006, 
accompanied 
by 
forms 
prescribed 
by 
the 
assessor and credited to the Maine Health Care Trust Fund, as 
established by Title 22, section 374, subsection 1. 
PARTF 
Sec. F-l. 
Employment retraining. 
The 
Maine 
Health 
Care 
Agency, as established in the Maine Revised Statutes, Title 22, 
section 375, shall coordinate with the Department of Economic and 
Community 
Development, 
the 
Department 
of 
Labor 
and 
private 
industry councils to ensure that employment retraining services 
are available for administrative workers employed by insurers and 
providers who are displaced due to the transition to the Maine 
Health Care Plan established in Title 22, section 372. 
Sec. F -2. Delivery of long-term health care services. 
The Maine 
Health Care Agency, as established in the Maine Revised Statutes, 
Title 22, 
section 375, 
shall study the delivery of long-term 
health care services to Maine Health Care Plan members 
under 
Title 22, chapter lOr:,. 
The stuc1·,· must address the best dnd 
m;,I~:t 
efficient 
manne': 
C'f 
deli·."~r-.· 
"i-
health 
''::2.':'? 
se~···'.·~·'?s 
~" 
individuals 
needing 
lona-t"=l"lll 
'01<:' 
ancJ. 
funcJ.~lF.( 
c;'."!l'.es 
1."1 
.. 
long-term care. 
In undertaking the 
study, 
the 
agency shall 
consult with the Maine 
Health Care 
Plan Transition Advisory 
Committee established in Part B of this Act, representatives of 
consumers and potential consumers of long-term care services, 
representatives 
of 
providers 
of 
long-term 
care 
services 
and 
representatives of employers, 
employees 
and the public. 
The 
agency shall report to the Legislature on or before January L 
2007 and may include suggested legislation in the report. 
Sec. F-3. Provision of health care services. 
The Maine Health Care 
Agency, as established in the Maine Revised Statutes, Title 22, 
section 375, shall study the provision of health care services 
under the MaineCare, Medicaid and Medicare programs. 
The study 
must consider the waivers necessary to coordiriate the Medicaid 
and Medicare programs with the Maine Health Care Plan established 
in Title 22, chapter 372; the method of coordination of benefit 
delivery and compensation; 
reorganization of State Government 
necessary to achieve the objectives of the agency; and any other 
changes in law needed to carry out the purposes of Title 22, 
chapter 106. 
The agency shall apply for all waivers required to 
coordinate the benefits of the Maine Health Care Plan and the 
Medicaid and Medicare programs. 
Legislature on or before March 1, 
legislation in the report. 
The agency shall report to the 
2006 and may include suggested 
SUMMARY 
This bill establishes a universal access health care system 
that offers 
a 
choice of coverage 
through organized delivery 
systems or through a managed care system operated by the Maine 
Health Care Agency and channels all health care dollars through a 
dedicated trust fund. 
1. 
Part A of the bill does the following. 
It establishes 
the 
Maine 
Health 
Care 
Plan 
to 
provide 
security through high-quality, 
affordable health care for the 
people of the State. 
All residents and nonresidents who maintain 
significant contact with 
the State are eligible for 
covered 
health care services through the Maine Health Care Plan. 
The 
plan is funded by the Maine Health Care Trust Fund, a dedicated 
fund 
receiving payments 
from 
employers, 
individuals 
and plan 
members and, after fiscal year 2005, 
from the 5¢ per package 
increase 
in the cigarette tax. 
The 
Maine 
Health Care 
Plan 
provides a range of benefits, including hospital services. health 
care 
services 
from 
participatina providers. 
laboratories 
and 
'ell"'1.' i 1 i ti'l t i ',-0 
imaging 
procecluIOs. 
hOITlP 
services, prescription druas 
substance 
abus~ 
tr eatmellt 
awl ,Ie--ices. mental healtiJ 
:,~er-v-ice::;. 
::::~ I" 
'_''-3'::: 
f 
~T i s.i ' .. '!l 
appliances, 
medical 
supplies 
and 
equipment 
and hospice 
care. 
Health 
care 
services 
under 
the 
Maine 
Health 
Care 
Plan 
are 
provided by participating providers in organized delivery systems 
and through the open plan, which is available to all providers. 
The plan is supplemental to other health care programs that may 
be available to plan members, 
such as Medicare, Medicaid, the 
federal Civilian Health and Medical 
Program of the Uniformed 
Services, 
the federal 
Indian Health Care 
Improvement Act 
and 
workers' compensation. 
It establishes the Maine Health Care Agency to administer 
and 
oversee 
the 
Maine 
Health 
Care 
Plan, 
to 
act 
under 
the 
direction of the Maine Health Care Council and to administer and 
oversee the Maine Health Care Trust Fund. 
The Maine Health Care 
Council is the decision-making and directing council for 
the 
agency and is composed of 3 full-time appointees. 
It directs 
the 
Maine 
Health 
Care 
Agency 
to 
establish 
programs to ensure quality, affordability, efficiency of care and 
health planning. 
The agency health planning program includes the 
establishment of global budgets for health care expenditures for 
the 
State 
and 
for 
institutions 
and 
hospitals. 
The 
health 
planning 
program 
also 
encompasses 
the 
certificate 
of 
need 
responsibilities of the 
agency pursuant to the Maine 
Revised 
Statutes, 
Title 
22, 
chapter 
103-A 
and 
the 
health 
planning 
responsibilities pursuant to Title 2, chapter 5. 
It contains a directive to the State Controller to advance 
$400,000 to the Maine Health Care Trust Fund on the effective 
date, January 1, 2006. 
This amount must be repaid by the Maine 
Health Care Agency by June 30, 2007. 
2. 
Part B of the bill establishes the Maine Health Care 
Plan Transition Advisory Committee. 
Composed 
of 
members, 
appointed and subject to confirmation, the committee is charged 
with holding public hearings, 
soliciting public 
comments 
and 
advising the Maine Health Care Agency on the transition from the 
current health 
care 
system 
to 
the 
Maine 
Health 
Care 
Plan. 
Members of the committee serve without compensation but may be 
reimbursed for their expenses. 
The 
committee is directed to 
report to. the Governor and to the Legislature on July I, 2006, 
January 
1, 
2007, 
July 
1, 
2007 
and 
December 
31, 
2007. 
The 
committee completes its work on December 31, 2007. 
3. 
Part C of the bill establishes the salaries of the 
members 
of 
the 
Maine 
Health 
Care 
Council 
and 
the executive 
director of the Maine Health Car~ Aaency. 
4. 
Part l' ')[ 
tll~ bill I""hif_,j 1_ 0 the 
sal~ '_'11 
t:iJ o 
"lnnl'?r'..: id J 
market of health insurance poli'..:ies and contracts thclt 
~h"])licate 
.. 
the coverage provided by the Maine 
the sale of health care policies 
duplicate and are supplemental to 
Health Care Plan. 
Health Care Plan. 
It allows 
and contracts that do not 
the coverage of the Maine 
5. 
Part E of the bill 
the cigarette tax beginning 
cigarette tax increase are 
Fund. 
imposes a 5¢ per package increase in 
December 1, 2005. 
Proceeds from the 
paid to the Maine Health Care Trust 
6. 
Part F of the bill directs the Maine Health Care Agency 
to 
ensure 
employment 
retraining 
for 
administrative 
workers 
employed by insurers and providers who 
are displaced by the 
transition to the Maine Health Care Plan. 
It directs the Maine 
Health 
Care 
Agency 
to 
study 
the 
delivery 
and 
financing 
of 
long-term 
care 
services 
to 
plan 
members. 
Consul tation 
is 
required with the Maine Health Care Plan Transition Advisory 
Committee, representatives of consumers and potential consumers 
of long-term care services and representatives of providers of 
long-term care services, employers, employees and the public. 
A 
report by the committee to the Legislature is due January 1, 2007. 
The 
Maine 
Health Care 
Agency is directed to study 
the 
provision of health care services under the MaineCare, Medicaid 
and Medicare programs, waivers, coordination of benefit delivery 
and compensation, reorganization of State Government necessary to 
accomplish the objectives of the Maine Health Care Agency and 
legislation needed to carry out the purposes of the bill. 
The 
agency 
is 
directed 
to 
apply 
for 
all 
waivers 
required 
to 
coordinate the benefits of the Maine Health Care Plan and the 
Medicaid and Medicare programs. 
A report by the agency is due to 
the Legislature by March 1, 2006.