An Act To Continue Maine's Leadership in Covering the Uninsured
Maine Legislature, Session 123, LD 2247
Committee: Insurance and Financial Services
Sponsors: PINGREE, SULLIVAN, BRAUTIGAM, CANAVAN, CROCKETT, CUMMINGS, FAIRCLOTH, PRIEST, BOWMAN, EDMONDS, MARTIN, MITCHELL
Amends: 24-A MRSA §2736-C, 5 MRSA §12004-G, 24-A MRSA §423-E, 24-A MRSA §6912, 22 MRSA §1721, 24-A MRSA §6913, 24-A MRSA §6913-A, 36 MRSA §4361, 36 MRSA §4365, 36 MRSA §4365-F, 36 MRSA §4365-G, 36 MRSA §4366-A, 36 MRSA §4381, 36 MRSA §4401, 36 MRSA §4403, 36 MRSA §4404-D, 24-A MRSA §6908, 24-A MRSA §69, 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2, 24-A MRSA §2808-B, 24-A MRSA §2839-B

Legislative Document 
No. 2247 
H.P.1608 
House of Representatives, March 5, 2008 
An Act To Continue Maine's Leadership in Covering the Uninsured 
Approved for introduction by a majority of the Legislative Council pursuant to Joint Rule 
203. 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative PINGREE of North Haven. 
Cosponsored by Senator SULLIVAN of York and 
17J~ 
1I1.71/u£~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: BRAUTIGAM of Falmouth, CANAVAN of Waterville, CROCKETT of 
Augusta, Speaker CUMMINGS of Portland, FAIRCLOTH of Bangor, PRIEST of Brunswick, 
Senators: BOWMAN of York, President EDMONDS of Cumberland, MARTIN of Aroostook, 
MITCHELL of Kennebec. 
Printed on recyded paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 24-A MRSA §2736-C, sub-§10 is enacted to read: 
10. 
Pilot projects; persons under 30 years of age. 
The superintendent shall 
authorize pilot projects in accordance with this subsection that allow a health insurance 
carrier that offers individual insurance, is marketing an individual insurance policy in this 
State and has a medical-loss ratio of at least 70% in the individual market to offer 
individual medical insurance products to persons under 30 years of age beginning July 1, 
2009. 
A. 
The superintendent shall review pilot project proposals submitted in accordance 
with rules adopted pursuant to paragraph E. The superintendent shall approve a pilot 
project proposal if it meets the minimum benefit requirements set forth in rules 
adopted pursuant to paragraph E and may not approve a proposal that does not 
provide such minimum benefit requirements. 
B. 
A pilot project approved by the superintendent pursuant to this subsection must 
provide coverage for specific health services, specific diseases and certain providers 
of health care services as required in this Title. 
C. 
A pilot project approved by the superintendent pursuant to this subsection 
qualifies as creditable coverage under this Title. Notwithstanding section 2849-B, 
subsection 4, a policy that replaces coverage issued under a pilot project approved 
under this subsection is not subject to any preexisting conditions exclusion 
provisions. Each carrier that offers an individual product pursuant to a pilot project 
approved under this subsection must combine the experience for that product with 
other individual products offered by that carrier as filed with the bureau when 
determining premium rates. The experience of a carrier's closed pool may not be 
taken into account in determining pilot project premium rates. 
D. 
Beginning in 2010, the superintendent shall report by March 1 st annually to the 
joint standing committee of the Legislature having jurisdiction over insurance matters 
on the status of any pilot project approved by the superintendent pursuant to this 
subsection. The report must include an analysis of the effectiveness of the pilot 
project in encouraging persons under 30 xears of age to purchase insurance and an 
analysis of the impact of the pilot project on the broader insurance market, including 
any impact on premiums and availability of coverage. 
E. 
The superintendent shall establish by rule procedures and policies that facilitate 
the implementation of a pilot project pursuant to this subsection, including, but not 
limited to, a process for submitting a pilot project proposal, minimum requirements 
for approval of a pilot project and any requirements for pharmacy benefits. Rules 
adopted pursuant to this paragraph are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A and must be adopted no later than 90 days after the 
effective date of this subsection. 
#
PARTB 
Sec. B-1. 5 MRSA §12004-G, sub-§14-F is enacted to read: 
14-F. 
Health Care 
Board of Directors 
of the Maine 
Reinsurance 
Association 
Expenses Only 
Sec. B-2. 24-A MRSA §423-E is enacted to read: 
§423-E. Report to Legislature. 
24-A §3903 
The superintendent shall report each year by March 1 st to the joint standing 
committee of the Legislature having jurisdiction over insurance matters on the impact of 
any changes to the rating provisions in section 2736-C, the status of the Maine Individual 
Reinsurance Association established pursuant to chapter 54 and the impact on rates 
related to reimbursements paid by the Maine Individual Reinsurance Association, the 
total number of individuals enrolled in any health insurance product regulated by the 
bureau and the number of previously uninsured or underinsured individuals who have 
enrolled during that year in any health insurance product regulated by the bureau, which 
information is collected pursuant to rules adopted under this section. Along with the 
annual report, the superintendant may submit any proposed legislation for consideration 
by the joint standing committee. 
Sec. B-3. 24-A MRSA §2736-C, sub-§2, ~, as amended by PL 2001, c. 410, 
Pt. A, §2 and affected by § 10, 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 following schedule and vlithin the listed percentage 
baRds in accordance with the limitations set out in this paragraph. 
(1) For all policies, 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 certificates that are executed, delivered, issued 
for delivery, continued or renewed in this State after between July 15, 1995 and 
June 30, 2009, the premium rate may not deviate above or below the community 
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 I, 2009, for each 
I 
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 family composition for which a carrier charges separate 
rates. 
(a) 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 
II 
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. 
(b) 
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. 
Sec. B-4. 24-A MRSA §2736-C, sub-§2, ~G is enacted to read: 
G. A carrier that adjusts its rate shall account in its experience for the effect of the 
annual reimbursements paid to the carrier by the Maine Individual Reinsurance 
Association established in chapter 54. 
Sec. B-S. 24-A MRSA §2736-C, sub-§2, ~ 
is enacted to read: 
H. A carrier that offered individual health plans prior to July 1, 2009 may close its 
individual book of business sold prior to July 1, 2009 and may establish a separate 
community rate for individuals applying for coverage under an individual health plan 
on or after July 1,2009. A carrier must merge the closed book with its open book by 
the earlier of: 
(1) July 1, 2012; and 
(2) When the number of subscribers remaining in a carrier's closed individual 
book of business is less than 25% ofthe carrier's individual health plan subscriber 
total as of June 30, 2009. In order to administer this subparagraph, a carrier shall 
compare the number of current individual health plan subscribers in its closed 
book of business to its individual health plan subscriber total as of June 30, 2009 
on an annual basis. 
The superintendent shall establish by rule procedures and policies that facilitate the 
implementation of this paragraph, including, but not limited to, notice requirements 
for policyholders and experience pooling requirements of individual health products. 
When 
establishing 
rules 
regarding 
experience 
pooling 
requirements, 
the 
superintendent shall ensure, to the greatest extent possible, the availability of 
affordable options for individuals transitioning from the closed book of business. 
Rules adopted pursuant to this paragraph are routine technical rules as defined In 
Title 5, chapter 375, subchapter 2-A. 
Sec. B-6. 24-A MRSA §2736-C, sub-§2-A is enacted to read: 
2-A. Reinsurance requirement. Carriers providing individual health plans are 
subject to the requirements of chapter 54. 
Sec. B-7. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
MAINE INDIVIDUAL REINSURANCE ASSOCIATION 
§3901. Short title 
This chapter may be known and cited as "the Maine Individual Reinsurance 
Association Act." 
§3902. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Association. "Association" means the Maine Individual Reinsurance Association 
established in section 3903. 
2. Board. "Board" means the board of directors of the association. 
3. Health maintenance organization. "Health maintenance organization" means an 
organization authorized under chapter 56 to operate a health maintenance organization in 
this State. 
4. Insurer. "Insurer" means an entity that is authorized to write medical insurance 
or that provides medical insurance in this State. 
"Insurer" includes an insurance 
company, a nonprofit hospital and medical service organization, a fraternal benefit 
society, a health maintenance organization, a self-insurance arrangement that provides 
health care benefits in this State to the extent allowed under the federal Employee 
Retirement Income Security Act of 1974, a 3rd-party administrator, a multiple-employer 
welfare arrangement, any other entity providing medical insurance or health benefits 
subject to state insurance regulation, any reinsurer of health insurance in this State, the 
Dirigo Health Program established in chapter 87 or any other state-run or state-sponsored 
health benefit program, whether fully insured or self-funded. 
5. Medical insurance. "Medical insurance" means a hospital and medical expense-
incurred policy, a nonprofit hospital and medical service plan, a health maintenance 
organization subscriber contract or other health care plan or arrangement that pays for or 
furnishes medical or health care services by insurance or otherwise, whether sold as an 
individual or group policy. "Medical insurance" does not include accidental injury, 
specified disease, hospital indemnity, dental, vision, disability income, Medicare 
supplement, long-term care or other limited benefit health insurance or credit insurance; 
coverage issued as a supplement to liability insurance; insurance arising out of workers' 
compensation or similar law; or automobile medical payment insurance or insurance 
under which benefits are payable with or without regard to fault and that is statutorily 
required to be contained in any liability insurance policy or equivalent self-insurance. 
6. Medicare. "Medicare" means coverage under both Parts A and B of Title XVIII 
of the Social Security Act, 42 United States Code, Section 1395 et seq., as amended. 
7. Member insurer. "Member insurer" means an insurer that offers individual 
medical insurance, is marketing an individual medical insurance policy in this State and 
has a medical-loss ratio of at least 70% in the individual insurance market. 
8. Producer. "Producer" means a person who is licensed to sell health insurance in 
this State. 
9. Reinsurer. "Reinsurer" means an insurer from whom a person providing health 
insurance for a resident procures insurance for itself with the insurer with respect to all or 
part of the medical insurance risk of the person. "Reinsurer" includes an insurer that 
provides employee benefits excess insurance. 
10. Resident. "Resident" has the same meaning as in section 2736-C, subsection 1, 
paragraph C-2. 
11. Third-party administrator. "Third-party administrator" means an entity that is 
paying or processing medical insurance claims for a resident. 
§3903. Maine Individual Reinsurance Association 
1. 
Association established. 
The Maine Individual Reinsurance Association is 
established as a nonprofit legal entity. As a condition of doing business, every member 
insurer must participate in the association. The Dirigo Health Program established in 
chapter 87 and any other state-run or state-sponsored health benefit program shall also 
participate in the association. 
2. 
Board of directors. The association is governed by a board of directors In 
accordance with this subsection. 
A. The board consists of 11 members appointed pursuant to this paragraph: 
(l) Five members appointed by the superintendent, of whom: 
(a) Two members must be chosen from the general public and may not be 
associated with the medical profession, a hospital or an insurer; 
(b) One member must be a representative of a public health plan; 
(c) One member must represent health insurance producers; and 
(d) One member must represent a statewide association representing small 
businesses that receives the majority of its funding from persons and 
businesses in the State; and 
(2) Six members appointed by insurers licensed to do business in this State, at 
least one of whom is a 3rd-party administrator other than an insurer. 
B. A board member appointed by the superintendent may be removed at any time 
without cause. 
C. A board member may not be a registered lobbyist under Title 3, chapter 15. 
D. Members of the board serve terms of3 years. 
E. The board shall elect one of its members as chair. 
F. Board members may be reimbursed from funds of the association for actual and 
necessary expenses incurred by them as members but may not otherwise be 
compensated by the association for their services. 
3. Plan of operation; rules. The association shall adopt a plan of operation in 
accordance with the requirements of this chapter and submit its articles, bylaws and 
operating rules to the superintendent for approval. If the association fails to adopt the plan 
of operation and suitable articles and bylaws within 90 days after the appointment of the 
board, the superintendent shall adopt rules to effectuate the requirements of this chapter, 
and those rules remain in effect until superseded by a plan of operation and articles and 
bylaws submitted by the association and approved by the superintendent. Rules adopted 
pursuant to this subsection by the superintendent are routine technical rules as defined in 
Title 5, chapter 375, subchapter 2-A. 
4. Immunity. A board member is not liable and is immune from suit at law or 
equity for any conduct performed in good faith that is within the subject matter over 
which the board has been given jurisdiction. 
§3904. Liability and indemnification 
1. Liability. The board and its employees may not be held liable for any obligations 
of the association. A cause of action may not arise against the association; the board, its 
agents or its employees; any insurer belonging to the association or its agents, employees 
or producers; or the superintendent for any action or omission in good faith in the 
performance of powers and duties pursuant to this chapter. 
2. 
Indemnification. 
The board in its bylaws or rules may provide for 
indemnification of, and legal representation for, its members and employees. 
§3905. Duties and powers of the association 
1. Duties. The association shall: 
A. 
Establish administrative and accounting procedures for the operation of the 
association; 
B. 
Establish procedures under which applicants and participants in the plan may 
have grievances reviewed by an impartial body and reported to the board; 
C. Select a plan administrator in accordance with section 3906; 
D. Establish procedures for the handling and accounting of association assets; and 
E. 
Establish an amount to be retained in the Reinsurance Association Reserve in 
accordance with section 3907. 
2. Powers. The association may: 
A. Exercise powers granted to nonprofit corporations under the laws of this State; 
B. 
Enter into contracts as necessary or proper to carry out the provisions and 
purposes of this chapter, including the authority, with the approval of the 
superintendent, to enter into contracts with similar organizations in other states for 
the joint performance of common administrative functions or with persons or other 
organizations for the performance of administrative functions; 
C. Sue or be sued, including taking any legal actions necessary or proper to recover 
or collect obligations due the association; 
D. Take any legal actions necessary to avoid the payment of improper claims against 
the association or the coverage provided by or through the association, to recover any 
amounts erroneously or improperly paid by the association, to recover any amounts 
paid by the association as a result of mistake of fact or law or to recover other 
amounts due the association; 
E. Appoint appropriate legal, actuarial and other committees as necessary to provide 
technical assistance in the operation of the plan, policy or other contract design and 
any other function within the authority ofthe association; 
F. 
Establish procedures for reinsuring risks of insurers In the association In 
accordance with section 3908; 
G. Provide for reinsurance of risks incurred by the association. The provision of 
reinsurance may not subject the association to any of the capital or surplus 
requirements, if any, otherwise applicable to reinsurers; and 
H. Apply for funds or grants from public or private sources, including federal grants 
provided to qualified high-risk reinsurance associations. 
3. 
Additional duties and powers. 
The superintendent may, by rule, establish 
additional powers and duties of the association and may adopt such rules as are necessary 
and proper to implement this chapter. Rules adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
4. 
Review for solvency. The superintendent shall review the operations of the 
association at least every 3 years to determine its solvency. If the superintendent 
determines that the funds of the association are insufficient to support the need for 
reinsurance, the superintendent may order the association to adjust the initial level of 
claims and the reserve amount to be retained by the association. 
5. 
Annual report. 
The association shall report annually to the joint standing 
committee of the Legislature having jurisdiction over health insurance matters by March 
15th. The report must include information on the financial solvency of the association and 
the administrative expenses of the association. 
6. Audit. The association must be audited at least every year by an independent 
auditor. A copy of the audit must be provided to the superintendent and to the joint 
standing committee of the Legislature having jurisdiction over health insurance matters. 
• 
§3906. Selection of plan administrator 
1. Selection of plan administrator. The board shall select an insurer or 3rd-party 
administrator, through a competitive bidding process, to administer the association. 
2. Contract with plan administrator. The plan administrator selected pursuant to 
subsection 1 is contracted for a period of 3 years. At least one year prior to the expiration 
of each 3-year period of service by a plan administrator, the board shall invite all insurers, 
including the current plan administrator, to submit bids to serve as the plan administrator 
for the succeeding 3-year period. The selection of the plan administrator for the 
succeeding period must be made at least 6 months prior to the expiration of the 3-year 
period. 
3. 
Duties of plan administrator. 
The plan administrator selected pursuant to 
subsection 1 shall: 
A. Perform all administrative functions relating to the association; 
B. Submit regular reports to the board regarding the operation of the association. The 
frequency, content and form of the reports must be as determined by the board; 
C. Following the close of each calendar year, report to the superintendent the amount 
of revenue received from the Dirigo Health Enterprise Fund pursuant to section 6915, 
the expenses of administration pertaining to reinsurance operations of the program 
and the incurred losses of the year; and 
D. Pay reinsurance amounts as provided for in the plan of operation. 
4. Payment to plan administrator. The plan administrator selected pursuant to 
subsection 1 must be paid, as provided in the contract of the association under subsection 
2, for the plan administrator's direct and indirect expenses incurred in the performance of 
the plan administrator's services. As used in this subsection, "direct and indirect 
expenses" includes that portion of the audited administrative costs, printing expenses, 
management expenses, building overhead expenses and other actual operating and 
administrative expenses of the plan administrator that are approved by the board as 
allocable to the administration of the association and included in the specifications of a 
bid under subsection 2. 
§3907. Reinsurance Association Reserve 
1. Reserve established. The Reinsurance Association Reserve is established within 
the Dirigo Health Enterprise Fund as an account for the deposit of funds as required by 
subsection 2. 
2. Funds. The Reinsurance Association Reserve is capitalized by money from the 
Dirigo Health Enterprise Fund, as established pursuant to section 6915, and any other 
fund advanced for initial operating expenses, any funds received from any public or 
private source, legislative appropriations, payments from state departments and agencies 
and such other means as the Legislature may approve. All money in the Reinsurance 
Association Reserve may be used only by the association for the purposes of this section. 
Funds in the reserve do not lapse, but must be carried forward to carry out the purposes of 
this chapter. 
§3908. Reinsurance 
1. 
Reinsurance amount. 
Any member insurer offering an individual health 
insurance plan pursuant to section 2736-C must be reinsured by the association to the 
level of coverage provided in this subsection. 
A. Beginning July 1, 2009, the association shall reimburse a member insurer with 
respect to claims of an insured individual at a rate of 50% of the aggregate claims 
paid between $75,000 and $250,000 for that person for covered benefits in a state 
fiscal year, to the extent funds are available pursuant to paragraph B. 
1 
B. The association shall limit total annual reimbursements to member insurers to the 
amount of money transferred annually from the Dirigo Health Enterprise Fund. Any 
money at the end of the fiscal year not used for reimbursements must be transferred 
to the Reinsurance Association Reserve account under section 3907. 
§3909. 
Actions against association or members based upon joint or collective 
actions 
Participation in the association, the establishment of forms or procedures or any other 
joint or collective action required by this chapter may not be the basis of any legal action 
or criminal or civil liability or penalty against the association or any insurer belonging to 
the association. 
Sec. B-S. Maine Individual Reinsurance Association; staggered terms. 
Notwithstanding the Maine Revised Statutes, Title 24-A, section 3903, subsection 2, 
paragraph C, the terms for initial appointments to the board of directors of the Maine 
Individual Reinsurance Association are as follows. Of those members of the board 
appointed by insurers, 2 members serve for a term of one year, 2 members for a term of 2 
years and 2 members for a term of 3 years. 
Of those members appointed by the 
Superintendent of Insurance, one member serves for a term of one year, 2 members serve 
for a term of 2 years and 2 members serve for a term of 3 years. The appointing authority 
shall designate the period of service of each initial appointee at the time of appointment. 
Sec. B-9. 
Funding. 
By January 1, 2012, the Maine Individual Reinsurance 
Association shall determine whether the amount transferred to the association as provided 
in the Maine Revised Statutes, Title 24-A, section 6915 is adequate to meet the 
reinsurance requirements of Title 24-A, chapter 54. The association shall submit a report 
to the joint standing committee of the Legislature having jurisdiction over insurance 
matters with its recommendations, if any, for changes to the funding percentage. The 
committee may submit a bill to the Second Regular Session of the 125th Legislature 
relating to the funding. 
PART C 
Sec. C-l. 24-A MRSA §6912, sub-§4, as enacted by PL 2003, c. 469, Pt. A, §8, 
is repealed. 
• 
PARTD 
Sec. D-l. 22 MRSA §1721 is enacted to read: 
§1721. Voluntary restraint 
1. Voluntarv restraint. To control the rate of growth of the costs of hospital 
services, each hospital licensed under chapter 405 may voluntarily restrain cost increases 
and consolidated operating margins in accordance with this section. Each hospital shall 
annually report to the joint standing committee of the Legislature having jurisdiction over 
health and human services matters regarding its efforts made pursuant to this section. The 
targets and methodology apply to each hospital's fiscal year beginning on or after the 
effective date of this section. 
A. Each hospital may voluntarily hold its consolidated operating margin to no more 
than 3%. For purposes of this paragraph, a hospital's consolidated operating margin 
is calculated by dividing its consolidated operating income by its total consolidated 
operating revenue. 
B. Each hospital may voluntarily restrain its increase in its expense per casemix-
adjusted inpatient and volume-adjusted outpatient discharge to no more than 110% of 
the forecasted increase in the hospital market basket index for the coming federal 
fiscal year, as published in the Federal Register, when the federal Centers for 
Medicare and Medicaid Services publishes the Medicare program's hospital inpatient 
prospective payment system rates for the coming federal fiscal year. For purposes of 
this paragraph, the measure of a hospital's expense per casemix-adjusted inpatient 
and volume-adjusted outpatient discharge is calculated by: 
(1) Calculating the hospital's total hospital-only expenses; 
(2) Subtracting from the hospital's total hospital-only expenses the amount of the 
hospital's bad debt; 
(3) Subtracting from the amount reached in subparagraph (2) the hospital taxes 
paid to the State during the hospital's fiscal year; and 
(4) Dividing the amount reached in subparagraph (3) by the product of: 
(a) The number of inpatient discharges, adjusted by the all payer case mix 
index for the hospital; and 
(b) The ratio of total gross patient service revenue to gross inpatient service 
revenue. 
For the purposes of this paragraph, a hospital's total hospital-only expenses include 
any item that is listed on the hospital's Medicare cost report as a subprovider, such as 
a psychiatric unit or rehabilitation unit, and does not include nonhospital cost centers 
shown on the hospital's Medicare cost report, such as home health agencies, nursing 
facilities, swing beds, skilled nursing facilities and hospital-owned physician 
practices. For purposes of this paragraph, a hospital's bad debt is as defined and 
reported in the hospital's Medicare cost report and as submitted to the Maine Health 
Data Organization pursuant to Title 22, chapter 1683. 
Page \0 - 123LR3143(Ol)-1 
PARTE 
Sec. E-l. 24-A MRSA §6913, as amended by PL 2007, c. 1, Pt. X, §§1 and 2 and 
affected by §3, is repealed. 
Sec. E-2. 24-A MRSA §6913-A is enacted to read: 
§6913-A. Health access surcharge 
1. 
Health access surcharge on paid claims required from health insurance 
carriers, 3rd-party administrators and employee benefit excess insurance carriers. 
All health insurance carriers, employee benefit excess insurance carriers and 3rd-party 
administrators, not including carriers and 3rd-party administrators with respect to 
accidental injury, specified disease, hospital indemnity, dental, vision, disability income, 
long-term care, Medicare supplement or other limited benefit health insurance, shall pay a 
health access surcharge of 1.8% on all paid claims. The following provisions govern the 
health access surcharge. 
A. A health insurance and employee benefit excess insurance carrier is not required 
to pay a surcharge on policies or contracts insuring federal employees. 
B. The surcharge applies to paid claims beginning July 1, 2008. 
C. Surcharge payments must be made monthly to Dirigo Health beginning August 
2008 and are due not less than 15 days after the end of the month and must accrue 
interest at 12% per annum on or after the due date, except that: 
(1) Surcharge payments for 3rd-party administrators for groups of 500 or fewer 
members may be made annually not less than 60 days after the close of the plan 
year. 
D. 
Surcharge payments received by Dirigo Health must be pooled with other 
revenues of the agency in the Dirigo Health Enterprise Fund established in section 
6915. 
2. Failure to pay health access surcharge payments. The superintendent may 
suspend or revoke, after notice and hearing, the certificate of authority to transact 
insurance in this State of any health insurance carrier or employee benefit excess 
insurance carrier or the license of any 3rd-party administrator to operate in this State that 
fails to pay a health access surcharge. In addition, the superintendent may assess civil 
penalties in accordance with section 12-A against any health insurance carrier, employee 
benefit excess insurance carrier or 3rd-party administrator that fails to pay a health access 
surcharge, may take any other enforcement action authorized under section 12-A to 
collect any unpaid health access surcharge payments and may collect the costs of 
enforcement including attorney's fees from those who fail to pay a health access 
surcharge. 
3. Definitions. As used in this section, the following terms have the following 
meanings. 
A. "Paid claims" means all payments made by health insurance carriers, 3rd-party 
administrators and employee benefit excess carriers for health and medical services 
• 
provided under policies issued pursuant to the laws of this State that insure residents 
of this State or, in the case of 3rd-party administrators, for health care for residents of 
this State, except that "paid claims" does not include: 
(1) Claims-related expenses and general administrative expenses; 
(2) Payments made to qualifYing providers under a "pay for performance" or 
other incentive compensation arrangement if the payments are not reflected in the 
processing of claims submitted for services rendered to specific covered 
individuals; 
(3) 
Claims paid by carriers and 3rd-party administrators with respect to 
accidental injury, specified disease, hospital indemnity, dental, vision, disability 
income, long-term care, Medicare supplement or other limited benefit health 
insurance, except that claims paid for dental services covered under a medical 
policy are included; 
(4) Claims paid for services rendered to nonresidents of this State; 
(5) Claims paid under retiree health benefit plans that are separate from and not 
included within benefit plans for existing employees; 
(6) Claims paid by an employee benefit excess carrier that have been counted by 
a 3rd-party administrator for determining its savings offset payment; 
(7) Claims paid for services rendered to persons covered under a benefit plan for 
federal employees; and 
(8) Claims paid for services rendered outside of this State to a person who is a 
resident of this State. 
In those instances in which a health insurance carrier, employee benefit excess 
insurance carrier or 3rd-party administrator is contractually entitled to withhold 
certain amounts from payments due to providers of health and medical services in 
order to help ensure that the providers can fulfill any financial obligations they may 
have under a managed care risk arrangement, the full amounts due the providers 
before application of such withholds must be reflected in the calculation of paid 
claims. 
B. "Claims-related expenses" includes: 
(1) Payments for utilization review, care management, disease management, risk 
assessment and similar administrative services intended to reduce the claims paid 
for health and medical services rendered to covered individuals, usually either by 
attempting to ensure that needed services are delivered in the most efficacious 
manner possible or by helping such covered individuals to maintain or improve 
their health; and 
(2) Payments that are made to or by organized groups of providers of health and 
medical services in accordance with managed care risk arrangements or network 
access agreements, which payments are unrelated to the provision of services to 
specific covered individuals. 
C. 
"Health and medical services" includes, 
but is not limited to, any services 
included in the furnishing of medical care, dental care to the extent covered under a 
medical insurance policy, pharmaceutical benefits or hospitalization, including but 
not limited to services provided in a hospital or other medical facility; ancillary 
services, including but not limited to ambulatory services; physician and other 
practitioner services, including but not limited to services provided by a physician'S 
assistant, nurse practitioner or midwife; and behavioral health services, including but 
not limited to mental health and substance abuse services. 
4. Rulemaking. The board may adopt any rules necessary to implement this section. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
Sec. E-3. 24-A MRS A §6915, as amended by PL 2005, c. 386, Pt. D, §3, is 
further amended to read: 
§69I5. 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 
Maine Individual Reinsurance Association. An amount equal to 20% of the deposits 
received by the Dirigo Health Enterprise Fund in the preceding month must be transferred 
to the Maine Individual Reinsurance Association established by chapter 54 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. 
Sec. E-4. 36 MRSA §4361, sub-§l-A, as amended by PL 1997, c. 458, §I, is 
further amended to read: 
I-A. Cigarette. "Cigarette" means a cigarette, as defined in gection 5702 of the 
GOOe,.~ 
A. Any roll of tobacco that is wrapped in paper or in any substance not containing 
tobacco; or 
I 
B. Any roll of tobacco that is wrapped in a reconstituted tobacco sheet or any other 
substance, other than leaftobacco, containing tobacco and that: 
(I) Has a typical cigarette size and shape, with a cellulose acetate or other 
cigarette-type integrated filter; 
(2) Is marketed in a traditional cigarette-type package or a package that bears a 
product designation or tax classification specified in 27 Code of Federal 
Regulations, Part 40.214(c); or 
(3) 
Has a filler that consists primarily of flue-cured, burley, oriental or 
unfermented tobaccos or any other material that yields the smoking 
characteristics of any of those tobaccos. 
•
I 
.. 
For purposes of this subsection, a substance other than leaf tobacco contains tobacco only 
if it consists of at least 2/3 by weight of tobacco leaf or other fibrous material from the 
plant Nicotiana tabacum or the plant Nicotiana rustica. 
Sec. E-5. 36 MRSA §4365, as amended by PL 2005, c. 457, Pt. AA, § 1 and 
affected by §8, 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 -WQ 125 mills for each cigarette. Payment of the tax is 
evidenced by the affixing of stamps to the packages containing the cigarettes. 
Sec. E-6. 36 MRSA §4365-F, as enacted by PL 2005, c. 457, Pt. AA, §3 and 
affected by §8, is repealed. 
Sec. E-7. 36 MRSA §4365-G is enacted to read: 
§4365-G. Application of cigarette tax rate increase 
The following provisions apply to cigarettes held for resale on the effective date of 
this section. 
1. Rate. Cigarettes stamped at the rate of 100 mills per cigarette and held for resale 
on the effective date of this subsection are subject to tax at the rate of 125 mills per 
cigarette. Cigarettes not defined as cigarettes prior to the effective date of this section are 
subject to tax at the rate of25 mills per cigarette. 
2. Liability. A person possessing cigarettes for resale is liable for a tax equal to 25 
mills per cigarette. Stamps indicating payment of the tax imposed by this section must be 
affixed to all packages of cigarettes held for resale as of the effective date of this section, 
except that cigarettes held in vending machines as ofthat 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 the effective date of 
this section, and 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 125 mills 
per cigarette placed in vending machines before the effective date ofthis section. 
4. Payment. Payment of the tax imposed by this section must be made to the State 
Tax Assessor accompanied by forms prescribed by the assessor. 
Sec. E-S. 36 MRSA §4366-A, sub-§2,~, as amended by PL 2007, c. 438, §93, 
is further amended to read: 
D. For stamps at the face value of 100 mills, the discount rate is 1.15%~ ; and 
Sec. E-9. 36 MRSA §4366-A, sub-§2, ~ 
is enacted to read: 
E. For stamps at the face value of 125 mills, the discount rate is 0.97%. 
Sec. E-IO. 36 MRSA §4381 is repealed and the following enacted in its place: 
§4381. Tax credited to Dirigo Health Enterprise Fund 
The State Controller shall transfer by the 15th of each month from General Fund 
revenues to the Dirigo Health Enterprise Fund established under Title 24-A, section 6915 
the amount of tax collected pursuant to this chapter that exceeds the total fiscal year-to-
date budget projection for that tax revenue as of the close of the preceding month based 
on the tax rate for cigarettes that was in effect on July I, 2008. For purposes of this 
section, "budget projection" is the amount derived from the March I, 2008 report of the 
Revenue Forecasting Committee established under Title 5, section 1710-E regarding the 
tax that is imposed by this chapter, as determined on a monthly basis by the assessor. 
II 
Sec. E-l1. 36 MRSA §4401, sub-§l-A is enacted to read: 
I-A. Cigar. "Cigar" means a tobacco product that: 
A. Consists of a roll of tobacco wrapped in leaf tobacco; or 
B. Consists of a roll of tobacco wrapped in a substance other than leaf tobacco and is 
not defined as a cigarette under section 4361, subsection I-A. 
Sec. E-12. 36 MRSA §4403, sub-§l, as amended by PL 2005, c. 627, §8, is 
further amended to read: 
1. Smokeless tobacco. A tax is imposed on all smokeless tobacco, including 
chewing tobacco and snuff, at the rate of 78% of the wholesale sales price beginning 
October 1,2005. 
Sec. E-13. 36 MRS A §4403, sub-§2, as amended by PL 2005, c. 627, §8, is 
further amended to read: 
2. Other tobacco. A tax is imposed on cigars, pipe tobacco and other tobacco 
intended for smoking at the rate of W% 78% of the wholesale sales price beginning 
October 1,2005. 
Sec. E-14. 36 MRSA §4404-D is enacted to read: 
§4404-D. Tax credited to Dirigo Health Enterprise Fund 
The State Controller shall transfer by the 15th of each month from General Fund 
revenues to the Dirigo Health Enterprise Fund established under Title 24-A, section 6915 
the amount of tax collected pursuant to this chapter that exceeds the total fiscal year-to-
date budget projection for that tax revenue as of the close of the preceding month based 
on the tax rate imposed by this chapter that was in effect on July 1,2008. For purposes of 
this section, "budget projection" is the amount derived from the March 1, 2008 report of 
the Revenue Forecasting Committee established under Title 5, section 1710-E regarding 
the tax that is imposed by this chapter, as determined on a monthly basis by the assessor. 
Sec. E-15. 
Savings offset payments calculated prior to effective date. 
Notwithstanding that section of this Part that repeals the Maine Revised Statutes, Title 
• 
IS 
• 
24-A, section 6913, the savings offset payments that have been calculated and required 
under former Title 24-A, section 6913 for claims paid prior to the effective date of this 
Part are due and payable in the same manner and subject to the same procedures set forth 
in former Title 24-A, section 6913 until the first monthly health access surcharge required 
under Title 24-A, section 6913-A becomes due and payable. 
Sec. E-16. 
Transfers to Dirigo Health Enterprise Fund in fiscal year 
2008-09. 
Notwithstanding the Maine Revised Statutes, Title 36, sections 4381 and 
4404-D, for fiscal year 2008-09, the total fiscal year-to-date budget projection excludes 
any period in fiscal year 2008-09 prior to the effective date of this Part. 
Sec. E-17. Effective date. This Part takes effect July 1,2008 or on the effective 
date ofthis Act, whichever occurs later. 
PARTF 
Sec. F-l. 24-A MRSA §6908, sub-§2,~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
B. 
Collect the savings offset payments provided in former section 6913 and the 
health access surcharge provided in section 6913-A; 
Sec. F-2. 24-A MRSA §6908, sub-§2, W, as amended by PL 2005, c. 400, Pt. 
C, §6, is repealed. 
Sec. F-3. 24-A MRSA §6908, sub-§2, ~G, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
G. 
Establish and operate the Maine Quality Forum in accordance with the 
provisions of section 6951 ~ ; and 
Sec. F -4. 24-A MRS A §6908, sub-§2, ~ 
is enacted to read: 
H. On a quarterly basis no less than 60 days from the end of each quarter, collect and 
report on: 
(1) The total enrollment in the Dirigo Health Program, including the number of 
enrollees previously underinsured or uninsured, the number of enrollees 
previously insured, the number of individual enrollees and the number of 
enrollees enrolled through small employers; 
(2) The number of new participating employers in the Dirigo Health Program; 
(3) 
The number of employers ceasing to offer coverage through the Dirigo 
Health Program; 
(4) The duration of employers' participation in the Dirigo Health Program; and 
(5) A comparison of actual enrollees in the Dirigo Health Program to projected 
enrollees. 
Dirigo Health shall submit the quarterly reports required under this subsection to the 
superintendent, to the joint standing committee of the Legislature having jurisdiction 
over approprIatIOns and financial affairs, to the joint standing committee of the 
Legislature having jurisdiction over insurance and financial services matters and to 
the joint standing committee of the Legislature having jurisdiction over health and 
human services matters. 
Sec. F-S. 24-A MRSA §69S1, 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. The forum must be 
funded, at least in part, through the savings offset payments made pursuant to former 
section 6913 and the health access surcharge pursuant to section 6913-A. 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. 
Sec. F-6. 24-A MRS A c. 87, sub-c. 3, as amended, is repealed. 
PART G 
Sec. G-l. 24-A MRSA §2736, sub-§3, ~, 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 12-month period. 
For the 
purposes of this calculation, any savings offset payments paid pursuant to former 
section 6913 must be treated as incurred claims. 
Sec. G-2. 24-A MRSA §2736, sub-§4, ~C, as amended by PL 2003, c. 469, Pt. 
E, § 1 0, 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 adequate, not unfairly 
discriminatory and in compliance with the requirements of former section 6913 
1 
remains with the insurer. 
Sec. G-3. 24-A MRSA §2736-A, as amended by PL 2003, c. 469, Pt. E, § 11, is 
further amended to read: 
§2736-A. Hearing 
•
If at any time the superintendent has reason to believe that a filing does not meet the 
requirements that rates not be excessive, inadequate, unfairly discriminatory or not in 
compliance with former section 6913 or that the filing violates any of the provisions of 
chapter 23, the superintendent shall cause a hearing to be held. 
Hearings held under this section must conform to the procedural requirements set 
forth in the Maine Administrative Procedure Act, Title 5, chapter 375, subchapter 4. 
Sec. G-4. 24-A MRSA §2736-C, sub-§2, W, 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 
former section 6913. 
Sec. G-S. 24-A MRSA §2736-C, sub-§S, 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 with accepted actuarial principles and practices and on the 
basis of incurred claims experience and earned premiums. 
For the purposes of this 
calculation, any savings offset payments paid pursuant to former section 6913 must be 
treated as incurred claims. 
Sec. G-6. 24-A MRSA §2S0S-B, sub-§2-A, ~C, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
C. Rates for small group health plans must be filed in accordance with this section 
and subsections 2-B and 2-C for premium rates effective on or after July 1, 2004, 
except that the filing of rates for small group health plans are not required to account 
for any savings offset payment or any recovery of that e.ffset payment pursuant to 
subsection 2-B, paragraph D and former section 6913 for rates effective before July 
1,2005. 
Sec. G-7. 24-A MRSA §2S0S-B, sub-§2-B, ~A, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
A. 
The superintendent shall disapprove any premium rates filed by any carrier, 
whether initial or revised, for a small group health plan unless it is anticipated that the 
aggregate benefits estimated to be paid under all the small group health plans 
maintained in force by the carrier for the period for which coverage is to be provided 
will return to policyholders at least 75% of the aggregate premiums collected for 
those policies, as determined in accordance with accepted actuarial principles and 
practices and on the basis of incurred claims experience and earned premiums. For 
the purposes of this calculation, any savings offset payments paid pursuant to former 
section 6913 must be treated as incurred claims. 
Sec. G-S. 24-A MRSA §2S0S-B, sub-§2-B, ~, 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 former section 6913. 
Sec. G-9. 24-A MRS A §2808-B, sub-§2-B, ~, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
F. 
Any rate hearing conducted with respect to filings that meet the criteria In 
paragraph E is subject to this paragraph. 
(l) A person requesting a hearing shall provide the superintendent with a written 
statement detailing the circumstances that justify a hearing, notwithstanding the 
satisfaction of the criteria in paragraph E. 
(2) If the superintendent decides to hold a hearing, the superintendent shall issue 
a written statement detailing the circumstances that justify a hearing, 
notwithstanding the satisfaction of the criteria in paragraph E. 
(3) In any hearing conducted under this paragraph, the bureau 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 adequate, not unfairly 
discriminatory and in compliance with the requirements of section 69 J 3 this Title 
remains with the carrier. 
Sec. G-IO. 24-A MRSA §2808-B, sub-§2-C, ~C, as enacted by PL 2003, c. 
469, Pt. E, § 16, is amended to read: 
C. 
If incurred claims were less than 78% of aggregate earned premiums over a 
continuous 36-month period, the carrier shall refund a percentage of the premium to 
the current in-force policyholder. 
For the purposes of calculating this loss-ratio 
percentage, any savings offset payments paid pursuant to former section 6913 must 
be treated as incurred claims. The excess premium is the amount of premium above 
that amount necessary to achieve a 78% loss ratio for all of the carrier's small group 
policies during the same 36-month period. 
The refund must be distributed to 
policyholders in an amount reasonably calculated to correspond to the aggregate 
experience of all policyholders holding policies having similar benefits. The total of 
all refunds must equal the excess premiums. 
(l) For determination of loss-ratio percentages in 2005, actual aggregate incurred 
claims expenses include expenses incurred in 2005 and projected expenses for 
2006 and 2007. 
For determination of loss-ratio percentages in 2006, actual 
incurred claims expenses include expenses in 2005 and 2006 and projected 
expenses for 2007. 
(2) The superintendent may waive the requirement for refunds during the first 3 
years after the effective date of this subsection. 
Sec. G-l1. 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 I 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 former section 6913. 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. 
Sec. G-12. 24-A MRSA §6908, sub-§l, ~A, as enacted by PL 2003, c. 469, Pt. 
A, §8, is amended to read: 
A. Take any legal actions necessary or proper to recover or collect savings offset 
payments due Dirigo Health or that are necessary for the proper administration of 
Dirigo Health; 
SUMMARY 
Part A authorizes the Superintendent of Insurance to approve a pilot project to 
authorize health insurance carriers to offer individual health insurance products for young 
people under the age ono. 
Part B establishes a reinsurance association for the individual health insurance 
market, without placing individuals in a separate risk association or providing coverage 
under different health plans than those available in the individual market. The Part also 
requires individual premium rates charged by a carrier during a rating period to not 
exceed 2.5 times the lowest individual rate charged by the carrier. This will lower rates 
for the younger demographic and limit rate increases on the older demographic. 
Part B also requires the Superintendent of Insurance to report yearly to the 
Legislature the impact of changes to the rating provisions in the Maine Revised Statutes, 
Title 24-A, section 2736-C and the establishment of the Maine Individual Reinsurance 
Association pursuant to Title 24-A, chapter 54, the total number of individuals enrolled in 
any health insurance product regulated by the Department of Professional and Financial 
Regulation, Bureau of Insurance and the numbers of previously uninsured individuals 
who have enrolled in any health insurance product regulated by the Bureau of Insurance. 
Part B also allows a carrier that offered individual health plans prior to July 1, 2009 
to close its book of business and establish a separate community rate for those individuals 
applying for coverage under an individual health plan on or after July 1, 2009. A carrier 
must merge the closed book with its open book by July 1, 2012 or when the number of 
subscribers remaining in a carrier's closed individual book of business is less than 25 
percent of the carrier's individual health plan subscriber total as of June 30, 2009, 
whichever is earlier. 
The Superintendent of Insurance shall develop rules regarding 
notice requirements and experience pooling in a carrier's open book of business to ensure 
the availability of affordable options for individuals transitioning from the closed book of 
business. 
Part C removes limitations on the ability of Dirigo Health to adjust the subsidy to 
individuals to ensure affordability. 
Part D makes permanent the temporary voluntary cost containment targets on hospital 
consolidated operating margins and cost increases, which were initiated in Public Law 
2003, chapter 469, Part F, section 1 and were reauthorized in Public Law 2005, chapter 
394, section 4. 
Part E makes changes to the funding for the Dirigo Health Program. The Part repeals 
the savings offset payment and replaces it with a health access surcharge of 1.8% on paid 
claims. 
Part E also increases the tax on cigarettes from $2.00 to $2.50 a pack and 
equalizes the rate of tax on all other tobacco products by a change in the taxation of "little 
cigars" from the tobacco products tax to the cigarette tax and an increase in the tobacco 
products tax from 20% to 78% of the wholesale price on cigars, pipe tobacco and other 
smoking tobacco. 
Part E also requires that all of the revenues from the surcharge and the cigarette tax 
increases be credited to the Dirigo Health Enterprise Fund to support both the Dirigo 
Health Program and the Maine Individual Reinsurance Association. Twenty percent of 
monthly deposits received by the Dirigo Health Enterprise Fund will be transferred to the 
association. 
Part F requires that Dirigo Health submit quarterly reports on information regarding 
enrollment in the Dirigo Health Program. This Part also repeals the Dirigo Health Risk 
Pool. 
Part G corrects cross-references to reflect the changes made in the bill. 
•
•