An Act To Continue Maine's Leadership in Covering the Uninsured
Maine Legislature, Session 123, LD 2247
Committee Amendment CA_A_H914 (House)
Amends: 24-A MRSA §2736-C, 24-A MRSA §6915, 36 MRSA §4401, 36 MRSA §4403

COMMITTEE AMENDMENT ",q" to H.P. 1608, L.D. 2247, Bill, "An Act To 
Continue Maine's Leadership in Covering the Uninsured" 
Amend the bill in Pal1 B by striking out all of section 3 and inserting the following: 
'Sec. B-3. 24-A MRSA §2736-C, sub-§2, ~B, as enacted by PL 1993, c. 477, Pt. 
C, § 1 and affected by Pt. F, § 1, is amended to read: 
B. 
A carrier may not vary the premium rate due to the gender, health status, 
occupation or industrv, claims experience or policy duration of the individual. 
Sec. B-4. 24-A MRSA §2736-C, sub-§2, ~, as amended by PL 2001, c. 410. 
Pt. A, §2 and affected by § I O. is further amended to read: 
D. 
A carrier may vary the premium rate due to age, occupation or industry and 
geographic area only under the follo'.ving schedule and '.vithin the listed percentage 
b-an-4s in accordance with the limitations set out in this paragraph. 
(1) For all pol icies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State between December 1. 1993 and 
July 14, 1994, the premium rate may not deviate above or below the community 
rate filed by the carrier by more than 50%. 
(2) For all policies, contracts or certificates that are executed. delivered. issued 
for delivery. continued or renewed in this State between July 15. 1994 and July 
14. 1995, the premium rate may not deviate above or below the community rate 
filed by the carrier by more than 33%. 
(3) For all policies. contracts or cel1ificates that are executed, delivered, issued 
for delivery, continued or renewed in this State aftef between July 15, 1995 and 
June 30, 2009, the premium rate may not deviate above or below the cOlllmunity 
rate filed by the carrier by more than 20%. 
(4) For all policies, contracts or certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State on or after July 1, 2009, for each 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A "to H.P. 1608, L.D. 2247 
health benefit plan offered by a carrier, the highest premium rate for each rating 
tier may not exceed 2.5 times the premium rate that could be charged to an 
eligible individual with the lowest premium rate for that rating tier in a given 
rating period. For purposes of this subparagraph, "rating tier" means each 
categorY of individual or familv composition for which a carrier charges separate 
rates. 
(a) In determining the rating factor for geographic area pursuant to this 
subparagraph, the ratio between the highest and lowest rating factor used by a 
carrier for geographic area may not exceed 1.5 and the ratio between highest 
and lowest combined rating factors for age and geographic area may not 
exceed 2.5. 
(b) In determining rating factors for age and geographic area pursuant to this 
subparagraph, no resulting rates, taking into account the savings resulting 
from the reinsurance program created by chapter 54, may exceed the rates 
that would have resulted from using projected claims and expenses and the 
rating factors applicable prior to July 1, 2009, as determined without taking 
into account the savings resulting from the Maine Individual Reinsurance 
Association established in chapter 54. 
(c) The superintendent shall 
adopt rules 
setting forth 
appropriate 
methodologies regarding determination of rating factors pursuant to this 
subparagraph. Rules adopted pursuant to this division are routine technical 
rules as defined in Title 5, chapter 375, subchapter 2-A.' 
Amend the bill in Part B in section 5 in paragraph H in the last paragraph in the last 
line (page 3, line 42 in L.D.) by inserting after the following: "2-A." the following: The 
superintendent shall direct the Consumer Health Care Division, established in section 
4321, to work with carriers and health advocacy organizations to provide information 
about comparable alternative insurance options to individuals in a carrier's closed book of 
business and upon request to assist individuals to facilitate the transition to an individual 
health plan in that carrier's or another carrier's open book of business.' 
Amend the bill in Part B in section 8 in the 3rd line (page 9, line 23 in L.D.) by 
striking out the following: "paragraph C" and inserting the following: 'paragraph 0' 
Amend the bill in Part E by striking out all of sections 3 and 4 and inserting the 
following: 
'Sec. E-3. 24-A MRSA §6915, as amended by PL 2005, c. 386, Pt. 0, §3, is 
further amended to read: 
§6915. Dirigo Health Enterprise Fund 
The Dirigo Health Enterprise Fund is created as an enterprise fund for the deposit of 
any funds advanced for initial operating expenses, payments made by employers and 
individuals, any savings offset payments made pursuant to former section 6913 and 
section 6913-A, revenues transferred pursuant to Title 36, chapters 703 and 704 and any 
funds received from any public or private source for the Dirigo Health Program and the 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to H.P. 1608, L.D. 2247 
Maine Individual Reinsurance Association established by chapter 54. An amount equal 
to 20% of the deposits received by the Dirigo Health Enterprise Fund from revenues 
deposited pursuant to section 6913-A and revenues transferred pursuant to Title 36, 
chapters 703 and 704 in the preceding month must be transferred to the Maine Individual 
Reinsurance Association by the first of each month beginning July 1, 2009. The fund 
may not lapse, but must be carried forward to carry out the purposes of this chapter.' 
Amend the bill in Part E in section 7 in §4365-G in subsection 1 by striking out all of 
the last underlined sentence (page 14, lines 18 and 19 in L.D.) 
Amend the bill in Part E in section 7 in §4365-G in subsection 4 in the 2nd line (page 
14, line 30 in L.D.) by inserting after the following: "Assessor" the following: 'by 
October 1, 2008,' 
Amend the bill in Part E by striking out all of section 11 and inserting the following: 
'Sec. E-l1. 36 MRS A §4401, sub-§2-A is enacted to read: 
2-A. Little cigar. "Little cigar" means a small cigar, as defined in Section 5702 of 
the Code, weighing not more than 3 pounds per thousand. 
Sec. E-12. 36 MRSA §4401, sub-§6-A is enacted to read: 
6-A. Roll-your-own tobacco. "Roll-your-own tobacco" means tobacco suitable for 
making cigarettes as defined in Section 5702 of the Code.' 
Amend the bill in P3Ii E in section 12 in subsection 1 in the 2nd line (page 15, line 19 
in L.D.) by striking out the following: "78%" and insefting the following: '1&% 97.5%' 
Amend the bill in Part E by striking out all of section 13 and inserting the following: 
'Sec. E-13. 36 MRS A §4403, sub-§2, as amended by PL 2005, c. 627, §8, is 
fUliher amended to read: 
2. Other tobacco. A tax is imposed on cigars, pipe tobacco and other tobacco 
intended for smoking, other than little cigars and roll-your-own tobacco, at the rate of 
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25% of the wholesale sales price beginning October 1,2005. 
Sec. E-14. 36 MRSA §4403, sub-§2-A is enacted to read: 
2-A. Little cigars and roll-vour-own tobacco. A tax is imposed on little cigars at 
the rate of 125 mills per little cigar and on roll-your-own tobacco at the rate of 125 mills 
per 0.036 ounce.' 
Amend the bill by inserting after Paft E the following: 
'PART F 
Sec. F -1. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services - Bureau of 0002 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A "to H.P. 1608, L.D. 2247 
I 
Initiative: Provides one-time funds for the administrative costs associated with the 
cigarette and other tobacco products tax increases. 
II 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
DEPARTMENT TOTAL-ALL FUNDS 
DIRIGO HEALTH 
Dirigo Health Fund 0988 
2007-08 
$0 
$0 
2007-08 
$0 
$0 
2008-09 
$43,857 
$43,857 
2008-09 
$43,857 
$43,857 
Initiative: Allocates Dirigo Health funds from the increase in the cigarette tax to $2.50 
and other tobacco products to 78%. 
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DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
Dirigo Health Fund 0988 
2007-08 
2008-09 
$0 
$28,502,356 
$0 
$28,502,356 
Initiative: Deallocates funds for Dirigo Health costs that were funded by the savings 
offset payment. 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
Dirigo Health Fund 0988 
2007 -08 
2008-09 
$0 
($32,900,000) 
$0 
($32,900,000) 
Initiative: Allocates Dirigo Health funds from a health access surcharge of 1.8% on all 
paid claims. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A "to H.P. 1608, L.D. 2247 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
DIRIGO HEALTH 
DEP ARTMENT TOTALS 
DIRIGO HEALTH FUND 
DEPARTMENT TOTAL-ALL FUNDS 
SECTION TOTALS 
GENERAL FUND 
DIRIGO HEALTH FUND 
SECTION TOTAL - ALL FUNDS 
2007-08 
$0 
$0 
2007-08 
$0 
$0 
2007-08 
$0 
$0 
$0 
2008-09 
$33,000,000 
$33,000,000 
2008-09 
$28,602,356 
$28,602,356 
2008-09 
$43,857 
$28,602,356 
$28,646,213 
Amend the bill by relettering or renumbering any nonconsecutive PaJi letter or 
section number to read consecutively. 
SUMMARY 
This amendment is the majority report of the committee. The amendment preserves 
the current law with regard to rating on the basis of geographic area at 20% above or 
below the community rate. The amendment otherwise permits premium rates to vary on 
the basis of age and geographic area in combination to a ratio of2.5 to 1 from the highest 
premium rate to the lowest premiulll rate as proposed in the bill. The amendment also 
requires that the Bureau of Insurance, Consumer Health Care Division provide assistance 
to individuals who are in the closed book of business as a result of the rating provisions in 
the bill to facilitate the transition to alternative health coverage in the open book of 
business. 
The amendment makes the following changes to the provisions of the bill relating to 
cigarette and tobacco taxes. 
The amendment removes the language in the bill 
reclassifying little cigars as cigarettes and adds a definition of "little cigar." It adds a 
definition of "roll-your-own tobacco." The amendment also changes the rate of tax on all 
other tobacco products to a cigarette tax equivalent of $2.50 per pack by taxing little 
cigars and roll-your-own tobacco the same as cigarettes and by adjusting the rate of tax 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A " 
to H.P. 1608, L.D. 2247 
on smokeless tobacco and on other cigars, pipe tobacco and other smoking tobacco in 
proportion to the increase in the cigarette tax. 
The amendment also makes technical corrections to the bill and adds an 
appropriations and allocations section to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Revised: 04/02108 
~ac 
LD 2247 
LR 3143(02) 
An Act To Continue Maine's Leadership in Covering the Uninsured 
Fiscal Note for Bill as Amended by Committee Amendment" A " 
Committee: Insurance and Financial Services 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Dlrigo Health Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Dingo Health Fund 
Fiscal Detail and Notes 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
$0 
$0 
$0 
$0 
$0 
$0 
2008-09 
($860.397) 
$43,857 
$28,602,356 
$904,254 
$48,595 
$28,602,356 
Projections 
2009-10 
($889.514) 
$0 
$33.154.381 
$889,514 
$48,792 
$33,154.381 
Projections 
2010-11 
($885.311 ) 
$0 
$34,292,790 
$885,3 11 
$48,561 
$34,292,790 
TransfeITing a portion of cigarette tax and other tobacco products tax revenue to the Dingo Health Agency will 
increase revenue in the Dirigo Enterprise Fund by $28,502,356 in fiscal year 2008-09. The related General Fund 
revenue increase in sales tax revenue is estimated to be $904.254 in fiscal year 2008-09. Maine Revenue Services will 
require a one-time General Fund appropriation of $43 ,857 in fiscal year 2008-09 for the administrative costs 
assocIated with these tax increases. 
This bill would eliminate the Saving Offset Payment (SOP), one of the funding sources for the Dirigo Health Program, 
beginning with the assessment effective July 1, 2008, and replace this revenue with a health access surcharge of 1.8?/o 
on paid claims and the cigarette tax and other tobacco products tax revenue. For the purposes of this fiscal note, the 
baseline assumption for future year SOPs is the $32.8 million SOP assessed for the year beginning July 1,2008. 
Any additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation can be 
absorbed by the bureau utilizing existing budgeted resources. The difference between the SOP budgeted to be paid by 
the State Employee Health program and the health access surcharge is expected to be minor. 
LR3l43(02) - Fiscal Note - Page 1 0[2 
The bill would create the Maine IndIvidual Reinsurance Association established as a nonprofit legal entity that is 
assumed to be funded beginning III July I, 2009 by 20% of Dirigo's share of the revenue generated by the health 
access surcharge and cigarette tax and other tobacco products tax revenue. 
Projections 
Projections 
Dirigo Health Fund Summary 
2008-09 
2009-10 
2010-11 
Revenue Changes: 
Elimination of the Savings Offset Payment 
($32,900,000) 
($32,800,000) 
($32,800,000) 
Paid Claims Surcharge 
$33,000,000 
$37,080,000 
$38,192,400 
Tobacco Tax Increase 
$28,502,356 
$28,874,381 
$28,900,390 
Revenue Changes 
$28,602,356 
$33,154,381 
$34,292,790 
Allocation Changes: 
Payment To Reinsurance Program 
$0 
$13,190,876 
$13,418,558 
Other Dirigo Net Allocation Increase 
$28,602,356 
$19,963,505 
$20,874,232 
Allocation Changes 
$28,602,356 
$33,154,381 
$34,292,790 
LR3143(02) - Fiscal Note - Page 2 of 2