An Act To Make Health Care Affordable, Accessible and Effective for All
Maine Legislature, Session 123, LD 1890
Committee Amendment CA_A_H615 (House)
Amends: 24-A MRSA §2743-B, 24-A MRSA §2, 24-A MRSA §2839, 24-A MRSA §2736-C, 24-A MRSA §2736, 24-A MRSA §2736-A, 24-A MRSA §2808-B, 24-A MRSA §423-D, 24-A MRSA §6908, 24-A MRSA §6903, 24-A MRSA §6910, 22 MRSA §1721, 24-A MRSA §2839-B, 24-A MRSA §6913, 24-A MRSA §6913-A, 24-A MRSA §6915, 36 MRSA §4365, 36 MRSA §4365-F, 36 MRSA §4365-G, 36 MRSA §4366-A, 36 MRSA §4385, 36 MRSA §4403, 36 MRSA §4403-A

COMMITTEE AMENDMENT 'A " 
to H.P. 1322, L.D. 1890, Bill, "An Act To 
Make Health Care Affordable, Accessible and Effective for All" 
Amend the bill by striking out everything after the enacting clause and before the 
summary and inserting the following: 
'PART A 
Sec. A-I. 24-A MRSA §2743-B is enacted to read: 
§2743-B. Coverage for tobacco cessation treatment 
1. Required coverage. All individual health plans as defined in section 2736-C 
must provide coverage for tobacco cessation treatment in accordance with any rules 
adopted by the Department of Health and Human Services. Coverage provided under this 
subsection may not be subject to any deductible, copayment, coinsurance, out-of-pocket 
maximum or other cost-sharing mechanism except as provided in subsection 2. 
2. 
Healtb savings accounts. 
Benefits for tobacco cessation treatment under 
individual health plans issued for use in connection with health savings accounts as 
authorized under Title XII of the Medicare Prescription Drug, Improvement. and 
Modernization Act of 2003 may be subject to the same deductibles and out-of-pocket 
limits that apply to overall benefits under the contract. 
3. Application. The requirements of this section apply to all policies and contracts 
executed, delivered, issued for delivery, continued or renewed in this State on or after the 
effective date of this section. For purposes of this section, all contracts are deemed to be 
renewed no later than the next yearly anniversary of the contract date. 
Sec. A-2. 24-A MRSA §2BOB-B, sub-§2, ~C, as amended by PL 2001, c. 410, 
Pt. A, §3 and affected by § 10, is further amended to read: 
C. A carrier may vary the premium rate due to family membership, smoking status, 
participation in wellness programs in accordance with section 4303, subsection 12 
and group size for all policies, contracts or certificates that are executed, delivered, 
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COMMITTEE AMENDMENT" A " 
to H.P.1322, L.D. 1890 
issued for delivery, continued or renewed in this State on or after January 1, 2008. 
The superintendent may adopt rules setting forth appropriate methodologies 
regarding rate discounts pursuant to this paragraph. Rules adopted pursuant to this 
paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter 
H-A2-A. 
Sec. A-3. 24-A MRSA §2839, as amended by PL 2003, c. 428, Pt. E, §2, is 
further amended by adding at the end a new paragraph to read: 
A carrier may vary the premium rate due to participation in wellness programs in 
accordance with section 4303, subsection 12 for all policies, contracts or certificates that 
are executed, delivered, issued for delivery, continued or renewed in this State on or after 
January 1, 2008. 
Sec. A-4. 24-A MRS A §4303, sub-§12 is enacted to read: 
12. Wellness proz:ram. A carrier offering a health plan in this State shall develop 
and maintain a wellness program for enrollees in small group and group health plans. A 
carrier shall offer enrollees that participate in a well ness program a financially tangible 
benefit, including. but not limited to, a discount in premium pursuant to section 2808-B, 
subsection 2, paragraph C. A carrier shall report before January 1st annually to the 
superintendent, in the manner and format approved by the superintendent, on the wellness 
program offered by the carrier, the financial benefits provided to enrollees, including 
premium discounts, and the number of enrollees participating in the wellness program. 
On or before April 1 st annually, the superintendent shall compile the data submitted by 
carriers as required in this subsection and submit that data in aggregate for all carriers to 
the joint standing committee of the Legislature having jurisdiction over insurance and 
financial services matters and to the Maine Quality Forum. 
Sec. A-5. 
Exemption from review. 
Notwithstanding the Maine Revised 
Statutes, Title 24-A, section 2752, this Part is enacted without review and evaluation by 
the Department of Professional and Financial Regulation, Bureau of Insurance. 
Sec. A-6. Application. That section of this Part that enacts the Maine Revised 
Statutes, Title 24-A, section 2743-B applies to all policies, contracts and certificates 
executed, delivered, issued for delivery, continued or renewed on or after January 1, 
2008. 
PARTB 
Sec. B-1. 24-A MRSA §2736-C, sub-§8, as amended by PL 1999, c. 256, Pt. D, 
§2, is further amended to read: 
8. Authority of the superintendent. The superintendent may shall by rule define 
one or more standardized individual health plans that must be offered by all carriers 
offering individual health plans in the State, other than carriers offering only CHAMPUS 
supplemental coverage. One of the plans defined by rule under this section must be a 
plan that includes a $1,000 deductible, a prescription drug benefit not subject to a 
deductible and the option of no cap on the lifetime maximum benefit. 
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COMMITTEE AMENDMENT " ~ " to H.P. 1322, L.D. 1890 
PARTC 
Sec. C-l. Rule Chapter 850 rulemaking; authority to submit legislation. 
By January 1, 2008, the Superintendent of Insurance shall report the results of the 
consensus-based rule-making process undertaken by the superintendent related to the 
consideration of possible amendments to Bureau of Insurance Rule Chapter 850. The 
Joint Standing Committee on Insurance and Financial Services may submit a bill to the 
standards in the Maine Revised Statutes, Title 24-A, section 4303, subsection I and 
Bureau of Insurance Rule Chapter 850. 
PARTD 
II 
Sec. D-l. 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. D-2. 24-A MRSA c. 54 is enacted to read: 
CHAPTER 54 
MAINE INDIVIDUAL REINSURANCE PROGRAM 
§3901. Short title 
This chapter may be known and cited as "the Maine Individual Reinsurance Program 
Act." 
§3902. Maine Individual Reinsurance Proeram 
1. Program established. The Maine Individual Reinsurance Program, referred to in 
this chapter as "the program," is established within the bureau. 
2. Plan of operation; rules. The superintendent shall adopt by rule a plan of 
operation in accordance with the requirements of this chapter within 90 days after the 
effective date of this chapter. 
Rules adopted pursuant to this subsection are major 
substantive 
rules as defined in Title 5, chapter 375, subchapter 2-A. The plan of 
operation must: 
A. 
Establish administrative and accounting procedures for the operation of the 
program; 
B. 
Establish procedures under which participants in the program may have 
grievances reviewed and reported to the superintendent; 
C. Account for the selection of a program administrator by the superintendent in 
accordance with section 3903; 
D. 
Establish procedures for the assessment of premiums and the handling and 
accounting of program assets; 
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E. Establish procedures for determining reinsurance amounts in accordance with 
section 3904; 
F. 
Establish procedures for contracting for appropriate legal, actuarial and other 
consultants as necessary to provide technical assistance and any other functions 
within the authority of the program; 
G. Establish rules, conditions and procedures for reinsuring risks of insurers under 
the program in accordance with section 3904; 
H. Provide for reinsurance of risks incurred by the program. The provision of 
reinsurance may not subject the program to any of the capital or surplus 
requirements, if any, otherwise applicable to reinsurers; 
I. 
Establish an advisory council to provide input on the program to the 
superintendent and program administrator. 
The advisory council must include 
representation from participating insurers, policyholders, consumers and other 
stakeholders; and 
J. 
Permit the program administrator to apply for funds or grants from public or 
private sources, including federal grants provided to qualified high-risk reinsurance 
plans. 
3. Review for solvency. The superintendent shall review the operations of the 
program after the first year and at least every 3 years thereafter to determine its solvency. 
4. Annual report. The program shall report annually on the operations of the 
program to the joint standing committee of the Legislature having jurisdiction over health 
insurance matters by March 15th. The report must include information on the number 
and value of claims reinsured by the program, the types and ages of risks reinsured, 
information derived from tracking enrollment in the fund, the surplus and reserves of 
carriers reinsured by the program and the financial solvency and the administrative 
expenses of the program. 
5. 
Audit. 
The program must be audited annually by the State Auditor. The 
superintendent. at the superintendent's discretion, may arrange for an independent audit to 
be conducted. A copy of the audit must be provided to the joint standing committee of the 
Legislature having jurisdiction over health insurance matters. 
6. Enterprise fund. The Maine Individual Reinsurance Program Fund is created as 
an enterprise fund for the deposit of any funds advanced for initial operating expenses, 
premiums paid pursuant to section 3904, revenue transferred to the fund pursuant to 
section 6915 and any funds received from any public or private source. The fund may 
not lapse, but must be carried forward to carry out the purposes of this chapter. 
§3903. Selection of program administrator 
1. 
Selection of Droeram administrator. 
The superintendent shall select an 
appropriate entity through a competitive bidding process to administer the program. 
2. Contract with program administrator. The program 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 the program administrator, the 
superintendent shall invite all appropriate entities, including the current program 
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administrator, to submit bids to serve as the program administrator for the succeeding 
3-year period. The selection of the program administrator for the succeeding period must 
be made at least 6 months prior to the expiration of the current 3-year period. 
3. Duties of prov;ram administrator. The program administrator selected pursuant 
to subsection 1 shall: 
A. Perform all administrative functions relating to the program; 
B. 
Submit regular reports to the superintendent regarding the operation of the 
program. The frequency, content and form of the reports must be as determined by 
the superintendent; 
C. Following the close of each calendar year, determine reinsurance premiums, the 
amount of revenue transferred to the program pursuant to section 6915, the expenses 
of administration pertaining to the reinsurance operations of the program and the 
incurred losses ofthe year and report this information to the superintendent; and 
D. Collect reinsurance premiums and pay reinsurance amounts as provided for in the 
plan of operation under section 3904, subsection 4. 
4. 
Payment to program administrator. 
The program administrator selected 
pursuant to subsection 1 must be paid, as provided in the contract of the program under 
subsection 2, for the program administrator's direct and indirect expenses incurred in the 
performance of the program 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 program administrator that are approved by the 
superintendent as allocable to the administration of the program and included in the 
specifications of a bid under subsection 2. 
§3904. Reinsurance; premium rates 
1. Carrier participation. Beginning on January 1, 2009, any carrier offering an 
individual health plan pursuant to section 2736-C is liable to the program for the 
reinsurance premium rate established in accordance with subsection 4. The Dirigo Health 
Program established in chapter 87, whether fully insured or self-funded, is also liable to 
the program for the reinsurance premium rate established in accordance with subsection 
4. 
2. Health plans eligible for reimbursement. The program must reimburse a carrier 
for 80% of claims paid by the carrier between $50,000 and $200,000 in a calendar year 
for any enrollee covered under an individual health plan that meets minimum standards 
for benefits and cost sharing as determined by the superintendent. The superintendent 
must consider the benefit plans required by Bureau of Insurance Rule Chapter 750 and by 
the Board of Directors of Dirigo Health pursuant to section 6910. Once claims paid on 
behalf of an enrollee reach or exceed $200,000 in a given calendar year, no further claims 
paid on behalf of that enrollee in that calendar year are eligible for reimbursement. The 
superintendent shall by rule adopt additional eligibility requirements for the minimum 
loss ratio that must be achieved by a carrier, consistent with the goals of enhancing 
competition, decreasing premiums and maximizing the availability of comprehensive 
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benefits. Rules adopted pursuant to this subsection are major substantive rules pursuant to 
Title 5, chapter 375, subchapter 2-A. 
3. Reinsurance amount. The total amount of claims projected to be reinsured for 
all individuals each calendar year and the projected administrative expenses for the 
program must be equal to the sum of projected revenue from the amounts transferred 
pursuant to section 6915 plus the reinsurance premiums collected pursuant to subsection 
4. The program may not obligate the General Fund beyond that amount allocated by the 
Legislature pursuant to section 6913-A and Title 36, sections 4365 and 4403-A. 
4. Premium rates. The superintendent shall, as part of the plan of operation under 
section 3902, subsection 2, establish a methodology for determining premium rates to be 
charged insurers offering individual health plans pursuant to section 2736-C. 
The 
superintendent shall review at least once every 2 years the methodology established under 
this subsection and may make changes to the methodology as needed. 
The 
superintendent shaH consider adjustments to the premium rates charged for reinsurance to 
reflect the use of effective cost containment and managed care arrangements by an 
insurer. 
Sec. D-3. 
Contingent effective date; report; certification. 
The Maine 
Individual Reinsurance Program established in the Maine Revised Statutes, Title 24-A, 
chapter 54 does not take effect unless the percentages certified by the Superintendent of 
Insurance for all carriers pursuant to subsection 3 is greater than the percentage reported 
by the superintendent pursuant to subsection 1. 
1. Report by superintendent. By April 1, 2008, the Superintendent of Insurance 
shall review the actuarial analysis prepared by consultants to the Department of 
Professional and Financial Regulation, Bureau of Insurance in May 2007 and report to the 
Joint Standing Committee on Insurance and Financial Services a range of the percentages 
by which individual health insurance rates would be less than those that would be 
applicable in the absence of the reinsurance requirements set forth in this Part, using a 
model based upon generally accepted actuarial principles. 
2. Filing by carriers. Each carrier providing individual health plans in the State 
shall file no later than September 1,2008 the percentage by which its rates for January 1, 
2009 and thereafter will be less than that which would be applicable in the absence of the 
reinsurance requirements set forth in this Part. 
3. Certification by superintendent. The Superintendent of Insurance shall review 
the filings for all carriers submitted pursuant to subsection 2 and shall certify whether the 
weighted average for all carriers meets the range of percentages described in subsection 
1. No later than November 1, 2008, the superintendent shall submit the certification to 
the Joint Standing Committee on Insurance and Financial Services and shall forward a 
copy of the certification to the Office of the Revisor of Statutes. 
Sec. D-4. Rulemaking. The Superintendent of Insurance shall provisionally adopt 
rules pursuant to the Maine Revised Statutes, Title 24-A, chapter 54 by January 1, 2008 
and present those rules for review by the Legislature pursuant to Title 5, chapter 375, 
subchapter 2-A during the Second Regular Session of the l23rd Legislature. 
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Sec. D-S. Review by Legislature. During the First Regular Session of the 125th 
Legislature, the joint standing committee of the Legislature having jurisdiction over 
insurance and financial services matters shaH review the operations of the Maine 
Individual Reinsurance Program established in the Maine Revised Statutes, Title 24-A, 
chapter 54. The committee shall seek input from the Superintendent of Insurance, health 
insurance carriers, insurance producers, employers and consumers. The committee may 
submit a bill to the First Regular Session of the 125th Legislature relating to the 
operations and effectiveness of the Maine Individual Reinsurance Program. 
PARTE 
Sec. E-l. 24-A MRSA §2736-C, sub-§l,~, as enacted by PL 1993, c. 477, Pt. 
C, § 1 and affected by Pt. F, § 1, is amended to read: 
B. "Community rate" means the average rate charged to all eligible individuals for 
individual health plans prior to aRY aEljustmeRts pUFsuaRt to subseetioR 2, paragraphs 
CaRd D based on the anticipated mix of business by age. The community rate may 
differ based on family composition. 
Sec. E-2. 24-A MRSA §2736-C, sub-§2, ~, as amended by PL 2001, c. 410, 
Pt. A, §2 and affected by § 1 0, 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 foHowing schedule and within the listed percentage 
bands. 
(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 aftef between July 15, 1995 and 
December 31, 2007, 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 January 1, 2008, the 
premium rate may not deviate on the basis of age above the community rate filed 
by the carrier by more than 20% and may not deviate on the basis of age below 
the community rate by more than 40%. The premium rate may not vary on the 
basis of geographic area or occupation or industry. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
PARTF 
Sec. F-l. Study of merger of individual and small group health insurance 
markets. The Superintendent of Insurance shall review the actuarial analysis completed 
by Gorman Actuarial, LLC in May 2007 regarding the merger of the individual and small 
group health insurance markets. 
The superintendent shall evaluate the efficacy of 
merging these markets, the impact on group size adjustments and the impact on premiums 
and make recommendations for statutory and regulatory approaches to minimize any 
adverse premium impact on small groups. 
The superintendent shall submit the 
superintendent's review and recommendations to the Joint Standing Committee on 
Insurance and Financial Services by January 1, 2008. The Joint Standing Committee on 
Insurance and Financial Services may submit legislation relating to the merger of the 
individual and small group markets to the Second Regular Session of the I23rd 
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Legislature. 
PART G 
Sec. G-l. 24-A MRSA §2736, sub-§5 is enacted to read: 
5. Standard for approval. The following standards apply to the making and use of 
rates pursuant to this section for individual health plans as defined in section 2736-C. 
A. Rates are not considered to be reasonable and necessary if the rates are likely to 
produce a profit from business in this State that is unreasonably high in relation to the 
benefits provided. the surplus requirements and the surplus available, or if expenses 
are unreasonably high in relation to the benefits provided. 
B. 
Rates are not considered to be reasonable and necessary if the rate structure 
established by a stock insurance company provides for replenishment of surpluses 
from premiums when replenishment is attributable to investment losses. 
C. Rates are inadequate if the rates are clearly insufficient, together with investment 
income attributable to the rates, to sustain projected losses and expenses for the 
benefits provided. 
D. Rates are unfairly discriminatory if price differentials fail to equitably reflect the 
differences in expected losses and expenses. 
Sec. G-2. 24-A MRSA §2736, sub-§6 is enacted to read: 
6. Factors to be considered. In determining whether the standards in subsection 5 
have been met, the factors considered by the superintendent may include but are not 
limited to: 
A. The past and prospective net underwriting gains of the insurer from the line of 
insurance for which the insurer seeks rate approval: 
B. The past. current and reasonably expected surplus levels of the carrier anticipated 
in the filing; 
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C. Investment income reasonably expected by the carrier from premiums anticipated 
in the filing, plus any other expected income from currently invested assets 
representing the amount expected on unearned premium reserves and loss reserves; 
D. The degree of competition in the market for which the rate approval is sought and 
in the overall health insurance market; and 
E. The profit and risk charge included in the previous year's rate filing and the profit 
actually achieved. 
Sec. G-3. 24-A MRSA §2736-A, first ~, as amended by PL 2003, c. 469, Pt. E, 
§ 11, is further amended to read: 
If at any time the superintendent has reason to believe that a filing does not meet the 
requirements that rates Hat be exeessive, reasonable and necessary, and not inadequate, 
unfairly discriminatory or not in compliance with former section 6913 and section 
6913-A or that the filing violates any of the provisions of chapter 23, the superintendent 
shall cause a hearing to be held. 
Sec. G-4. 24-A MRS A §2S0S-B, sub-§2-B, as enacted by PL 2003, c. 469, Pt. 
E, § 16, is amended to read: 
2-D. Rate review and hearings. Except as provided in subsection 2-C, rate filings 
are subject to this subsection. 
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 sQviags offset payments paid pursuant to former 
section 6913 and section 6913-A must be treated as incurred claims. 
B. If at any time the superintendent has reason to believe that a filing does not meet 
the requirements that rates be reasonable and necessary and not be exeessive, 
inadequate or unfairly discriminatory 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 subsection must conform to the procedural requirements set forth in Title 
5, chapter 375, subchapter 4. The superintendent shall issue an order or decision 
within 30 days after the close of the hearing or of any rehearing or reargument or 
within such other period as the superintendent for good cause may require, but not to 
exceed an additional 30 days. In the order or decision, the superintendent shall either 
approve or disapprove the rate filing. If the superintendent disapproves the rate 
filing, the superintendent shall establish the date on which the filing is no longer 
effective, specify the filing the superintendent would approve and authorize the 
insurer to submit a new filing in accordance with the terms of the order or decision. 
C. When a filing is not accompanied by the information upon which the carrier 
supports the filing or the superintendent does not have sufficient information to 
determine whether the filing meets the requirements that rates be reasonable and 
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.. to H.P. 1322, L.D. 1890 
necessary and not be ~eessi ... e, inadequate, unfairly discriminatory or not in 
compliance with former section 6913 and section 6913-A, the superintendent shall 
require the carrier to furnish the information upon which it supports the filing. 
D. A carrier may not increase its rate to account for any payment made pursuant to 
former section 6913 or section 69l3-A. A carrier that otherwise adjusts its rate shall 
account for the sayings offset payment payments paid pursuant to former section 
6913 or section 69l3-A or any recovery of that savings offset payment those 
payments in its experience consistent with this section aaa, former section 6913 and 
section 69l3-A. With regard to accounting for any recovery of the payments paid 
pursuant to former section 6913 or section 6913-A. a carrier shall provide 
demonstrable proof to the superintendent and quantify the total amount negotiated 
and saved by the carrier. 
E. Any filing of rates, rating formulas and modifications that satisfies the criteria set 
forth in this paragraph is subject to the provisions of paragraph F: 
(1) The proposed rate for any group or subgroup does not include a unit cost 
change that exceeds the index of inflation multiplied by 1.5, excluding any 
approved rate differential based on age. For the purposes of this subparagraph, 
"index of inflation" means the rate of increase in medical costs for a section of 
the United States selected by the superintendent that includes this State for the 
most recent 12-month period immediately preceding the date of the filing for 
which data are available; and 
(2) The carrier demonstrates 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 ratio of benefits incurred to premiums earned averages 
no less than 78% for the previous 36-month period. 
F. 
Any rate hearing conducted with respect to filings that meet the criteria in 
paragraph E is subject to this paragraph. 
(1) 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 6913 remains 
with the carrier. 
G. The following standards apply to the making and use of rates pursuant to this 
section. 
(1) Rates are not considered to be reasonable and necessary ifthe rates are likely 
to produce a profit from business in this State that is unreasonably high in 
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relation to the benefits provided, the surplus requirements and the surplus 
available, or if expenses are unreasonably high in relation to the benefits 
provided. 
(2) Rates are not considered to be reasonable and necessary if the rate structure 
established by a stock insurance company provides for replenishment of 
surpluses from premiums when replenishment is attributable to investment losses. 
(3) 
Rates are inadequate if the rates are clearly insufficient, together with 
investment income attributable to the rates, to sustain projected losses and 
expenses for the benefits provided. 
(4) Rates are unfairly discriminatory if price differentials fail to equitably reflect 
the differences in expected losses and expenses. 
H. In determining whether the standards in paragraph G have been met, the factors 
considered by the superintendent may include but are not limited to: 
(I) The past and prospective net underwriting gains of the insurer from the line 
of insurance for which the insurer seeks rate approval; 
(2) 
The past, current and reasonably expected surplus levels of the carrier 
anticipated in the filing; 
(3) 
Investment income reasonably expected by the carrier from premiums 
anticipated in the filing plus any other expected income from currently invested 
assets representing the amount expected on unearned premium reserves and loss 
reserves; 
(4) The degree of competition in the market for which the rate approval is sought 
and in the overall health insurance market; and 
(5) The profit and risk charge included in the previous year's rate filing and the 
profit actually achieved. 
PARTH 
Sec. H-l. 24-A MRSA §2736, sub-§2, as amended by PL 1997, c. 344, §8, is 
further amended to read: 
2. Filing; information. When a filing is not accompanied by the information upon 
which the insurer supports such filing, or the superintendent does not have sufficient 
information to determine whether such filing meets the requirements that rates be 
reasonable and necessary and not be eKGessi't'e, inadequate or unfairly discriminatory, the 
superintendent shall require the insurer to furnish the information upon which it supports 
the filing. -A- Notwithstanding the exception set forth in Title 1, section 402, subsection 
3, paragraph B, a filing and supporting information, except for descriptions of the amount 
and terms or conditions of compensation or reimbursement in a contract between an 
insurer and a 3rd party, are public records within the meaning of Title 1, section 402, 
subsection 3 and become part of the official record of any hearing held pursuant to 
section 2736-A. 
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Sec. H-2. 24-A MRSA §2736-C, sub-§2,~, 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 sa"liRgs offset paymeRt 
payments paid pursuant to former section 6913 or section 6913-A or any recovery in 
that offset paymeRt of those payments in its experience consistent with this section 
aRd, former section 6913 and section 6913-A. except that a carrier may not increase 
its rate to account for any payment made pursuant to section 6913-A unless the 
superintendent certifies that the aggregate incurred claims estimated to be paid under 
all individual health plans maintained in force by the carrier for the period for which 
coverage is to be provided will return to policyholders at least 83% of the aggregate 
earned premiums for those policies as determined in accordance with actuarial 
principles and practices. With regard to accounting for any recovery of the payments 
paid pursuant to former section 6913 or section 6913-A. a carrier shall provide 
demonstrable proof to the superintendent and quantify the total amount negotiated 
and saved by the carrier. A carrier may not increase its rate to account for any 
reinsurance premiums paid pursuant to chapter 54. 
Sec. H-3. 24-A MRSA §2736-C, sub-§5, as amended by PL 2003, c. 469, Pt. E, 
§ 13, is further amended to read: 
5. Loss ratios. For all policies and certificates issued on or after the effective date of 
this section, the superintendent shall disapprove any premium rates filed by any carrier, 
whether initial or revised, for an individual health policy unless it is anticipated that the 
aggregate benefits estimated to be paid under all the individual health policies maintained 
in force by the carrier for the period for which coverage is to be provided will return to 
policyholders at least 9-S% 78% 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 and section 
6913-A must be treated as incurred claims. If incurred claims were less than 78% of 
aggregate earned premiums over a continuous 36-month period, the carrier shall refund 
total excess premiums to current in-force policyholders. The excess premium is the 
amount of premium above that amount necessary to achieve a 78% loss ratio for all of the 
carrier's individual 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 poHcyholders holding policies having similar benefits. The 
total of all refunds must equal the excess premiums. The superintendent may require 
further support for the unpaid claims estimate and may require refunds to be recalculated 
if the estimate is found to be unreasonably large. The superintendent shall adopt rules 
setting forth appropriate methodologies for determining incurred claims experience and 
earned premiums and for calculating refunds pursuant to this subsection. Rules adopted 
pursuant to this subsection are major substantive rules as defined in Title 5, chapter 375, 
subchapter 2-A. 
Sec. H-4. 24-A MRSA §2808-B, sub-§2-A,~, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
B. -A- Notwithstanding the exception set forth in Title 1, section 402, subsection 3, 
paragraph B, a filing and supporting information, except for descriptions of the 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 1322, L.D. 1890 
amount and terms or conditions of compensation or reimbursement in a contract 
between an insurer and a 3rd party, are public records eKoept as pro,"ided e;>' within 
the meaning of Title 1, section 402, subsection 3 and become part of the official 
record of any hearing held pursuant to subsection 2-B, paragraphs paragraph B ef-I'.. 
Sec. H -5. Review of Rule 945 filings. The Superintendent of Insurance shall 
review the data reported by insurance companies pursuant to Bureau of Insurance Rule 
Chapter 945 and identify any gaps in the data required to be reported that would improve 
transparency in the development of premium rates. On or before January 1, 2008, the 
superintendent shall report the superintendent's findings to the Joint Standing Committee 
on Insurance and Financial Services. The Joint Standing Committee on Insurance and 
Financial Services may submit legislation relating to the superintendent's findings to the 
PART I 
Sec. 1-1. 24-A MRSA §423-D, sub-§3 is enacted to read: 
3. Report by superintendent. The superintendent shall report each year by March 
I st to the joint standing committee of the Legislature having jurisdiction over insurance 
matters on the impact of changes to the rating provisions in section 2736-C and the 
establishment of the Maine Individual Reinsurance Program pursuant to chapter 54, the 
premium rate reductions achieved, if any. the impact on a carrier's market share and the 
number of carriers, the impact on the types of health insurance products offered. 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. 
Sec. 1-2. 
Report on employer and individual shared responsibility 
requirements. The Governor's Office of Health Policy and Finance, in conjunction 
with the Department of Labor, shall review and analyze the impact of a shared 
responsibility requirement on individuals and employers in this State. In conducting the 
review and analysis required by this section, the Governor's Office of Health Policy and 
Finance shall: 
I. Review laws enacted in other states, particularly Massachusetts and Vermont, that 
mandate health insurance coverage for individuals and employers; 
2. Analyze the impact of such a requirement on individuals and employers in this 
State; and 
3. Make recommendations for appropriate shared responsibility requirements for 
individuals and employers. 
On or before March I, 2008, the Governor's Office of Health Policy and Finance 
shall report its findings to the Joint Standing Committee on Insurance and Financial 
Services. The Joint Standing Committee on Insurance and Financial Services may submit 
legislation relating to the office's findings to the Second Regular Session of the 123rd 
Legislature. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
PARTJ 
Sec. J-l. 24-A MRSA §6908, sub-§l, ~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
K. Provide staff support and other assistance to the Maine Quality Forum established 
in section 695 I, including assigning a director and other staff as needed to conduct 
the work of the Maine Quality Forum; ftfld 
Sec. J-2. 24-A MRSA §6908, sub-§l, ~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
L. In accordance with the limitations and restrictions of this chapter, cause any of its 
powers or duties to be carried out by one or more organizations organized, created or 
I I 
operated under the laws of this State7~ 
Sec. J-3. 24-A MRSA §6908, sub-§l, ~ 
is enacted to read: 
M. Establish and administer grant. subsidy and facilitation programs designed to 
assist providers and health care practitioners in the development, enhancement and 
maintenance of quality improvement infrastructure and processes. Dirigo Health may 
solicit and collect contributions to fund these programs; and 
PART K 
Sec. K-l. 24-A MRSA §6903, sub-§6, as enacted by PL 2003, c. 469, Pt. A, §8, 
is amended to read: 
6. 
Eligible employee. 
"Eligible employee" means an employee of an eligible 
I 
business who works at least 20 hours per week for that eligible business. except that an 
eligible business may elect to treat as eligible an employee who works a normal 
workweek of at least 10 hours as long as at least one employee works a normal workweek 
of 30 hours or more. "eligible empl~!ee" does Rot The board may, by rule, permit an 
eligible business to include an employee who works on a temporary or substitute basis or 
who does Rot wori( more thaR 26 '+'teeks aRRually seasonal basis. 
Sec. K-2. 24-A MRSA §6908, sub-§l, ~ 
is enacted to read: 
N. 
Provide subsidies in the same manner as subsidies for enrollees pursuant to 
section 6912, subsection 4 for eligible enrollees covered under health benefit plans 
approved by the board pursuant to section 6910, subsection 3, paragraph A that are 
offered by multiple licensed health insurance carriers in the State. 
Sec. K-3. 24-A MRSA §6910, sub-§3, as amended by PL 2005, c. 400, Pt. C, §8, 
is further amended to read: 
3. Carrier participation requirements. To qualify as a carrier of Dirigo Health 
Program coverage, a health insurance carrier must: 
A. Provide the comprehensive health services and benefits as determined by the 
board, including a standard benefit package that meets the requirements for mandated 
coverage for specific health services, specific diseases and for certain providers of 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A 
.. to H.P. 1322, L.D. 1890 
health services under Title 24 and this Title and any supplemental benefits the board 
wishes to make available; and 
B. Ensure that: 
(1) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees do not charge plan enrollees or 3rd parties for covered health care 
services in excess of the amount allowed by the carrier the provider has 
contracted with, except for applicable copayments, deductibles or coinsurance or 
as provided in section 4204, subsection 6; 
(2) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees do not refuse to provide services to a plan enrollee on the basis of 
health status, medical condition, previous insurance status, race, color, creed, age, 
national origin, citizenship status, gender, sexual orientation, disability or marital 
status. This subparagraph may not be construed to require a provider to furnish 
medical services that are not within the scope of that provider's license; and 
(3) Providers contracting with a carrier contracted to provide coverage to plan 
enrollees are reimbursed at the negotiated reimbursement rates between the 
carrier and its provider network. 
Health insurance carriers that seek to qualify to provide Dirigo Health Program coverage 
must may also qualify as health plans in Medicaid. 
Sec. K-4. 24-A MRSA §6910, sub-§4, ~, as amended by PL 2005, c. 400, Pt. 
C, §8, is further amended to read: 
B. 
Dirigo Health shall contract with eligible businesses seeking assistance from 
Dirigo Health in arranging for health benefits coverage by the Dirigo Health Program 
for their employees and dependents as set out in this paragraph. 
(1) 
Dirigo Health may establish contract and other reporting forms and 
procedures necessary for the efficient administration of contracts. 
(2) Dirigo Health shall collect payments from participating employers and plan 
enrollees to cover the cost of: 
(a) The Dirigo Health Program for enrolled employees and dependents in 
contribution amounts determined by the board; 
(b) 
Dirigo Health's quality assurance, disease prevention, disease 
management and cost-containment programs; 
(c) Dirigo Health's administrative services; and 
(d) Other health promotion costs. 
(3) Dirigo Health shall establish the minimum required contribution levels, not 
to exceed 60%, to be paid by employers toward the aggregate payment in 
subparagraph (2) and establish an equivalent minimum amount to be paid by 
employers or plan enrollees and their dependents who are enrolled in MaineCare. 
The minimum required contribution level to be paid by employers must be 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 1322, L.D. 1890 
prorated for employees that work less than the number of hours of a full-time 
equivalent employee as determined by the employer. 
Dirigo Health may 
establish a separate minimum contribution level to be paid by employers toward 
coverage for dependents ofthe employers' enrolled employees. 
(4) Dirigo Health shall require participating employers to certifY that at least 
75% of their employees that work 30 hours or more per week and who do not 
have other creditable coverage are enrolled in the Dirigo Health Program and that 
the employer group otherwise meets the minimum participation requirements 
specified by section 2808-B, subsection 4, paragraph A. 
(5) Dirigo Health shall reduce the payment amounts for plan enrollees eligible 
for a subsidy under section 6912 accordingly. Dirigo Health shall return any 
payments made by plan enrollees also enrolled in MaineCare to those enrollees. 
(6) Dirigo Health shall require participating employers to pass on any subsidy in 
section 6912 to the plan enrollee qualifYing for the subsidy, up to the amount of 
payments made by the plan enrollee. 
(7) Dirigo Health may establish other criteria for participation. 
(8) Dirigo Health may limit the number of participating employers. 
(9) Dirigo Health may provide participating employers assistance to adopt and 
maintain a payroll deduction program to facilitate the payment of health benefit 
plan premium payments by employees to benefit from deductibility of gross 
income under 26 United States Code, Section 125. 
PARTL 
Sec. L-l. 22 MRSA §1721 is enacted to read: 
§1721. Voluntary restraint 
1. Voluntary 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 
July 1. 2008. 
A. Each hospital may voluntarily hold its consolidated operating margin to no more 
than 3%. For purposes of this section. 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 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT "A" to H.P. 1322, L.D. 1890 
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: 
Ca) 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, 
C. If. in any year, a majority of hospitals do not voluntarily restrain cost increases 
pursuant to this section, the Advisory Council on Health Systems Development 
established in Title 2, section 104 shall recommend to the Legislature options for 
achieving the restraints in cost increases in accordance with this section. 
PARTM 
Sec. M-l. 
Dirigo Health Program demonstration project for health 
coverage of temporary and seasonal workers and direct-care workers 
providing long-term care. The Board of Directors of Dirigo Health may establish a 
demonstration project to design a targeted DirigoChoice health coverage plan to meet the 
needs of temporary and seasonal workers and long-term care employers and their 
employees. The health coverage plan designed by the board pursuant to this section must 
allow temporary and seasonal workers and long-term care employers to offer monthly 
premium assistance to temporary and seasonal workers and direct-care workers eligible 
for coverage under DirigoChoice as an individual and accommodate contributions for 
premium assistance from more than one employer. In designing the plan, the board shall 
consult with and seek input from temporary and seasonal employers and workers and 
long-term care employers and direct-care workers. The board may establish a cap on the 
number of employers and workers that participate in the demonstration project and shall 
COMMITTEE AMENDMENT 
f. ~\. 
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1 
COMMITTEE AMENDMENT "A " 
to H.P. 1322, L.D. 1890 
evaluate the demonstration project for its impact on workforce retention. The board shall 
operate the demonstration project on a cost-neutral basis within the limitation of available 
resources and shall maximize the use of federal Medicaid funds. In the event the board 
ends the demonstration project, the board shall ensure that participating employers and 
employees maintain DirigoChoice health coverage. 
The board shall submit a report to 
the joint standing committee of the Legislature having jurisdiction over health insurance 
and financial services matters on the operation of the demonstration project. 
PARTN 
Sec. N-l. 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 sa .... ings offset payments or 
recovery of those sayings offset payments consistent with former section 6913 or section 
6913-A. 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 I, section 402, subsection 3. 
Sec. N-2. 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 sa-vings offset 
payments provided in section 6913-A due Dirigo Health or that are necessary for the 
proper administration of Dirigo Health; 
Sec. N-3. 24-A MRSA §6908, sub-§2,~, as enacted by PL 2003, c. 469, Pt. A, 
§8, is amended to read: 
B. Collect the sa't'ings offset payments provided in former section 6913 or section 
6913-A; 
Sec. N-4. 24-A MRSA §6908, sub-§2, ~, as amended by PL 2005, c. 400, Pt. 
C, §6, is further amended to read: 
F. Develop a high-risk pool for plan enrollees in the Dirigo Health Program in 
accordance with the provisions of section 6971; aRd 
Sec. N-5. 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 695 k and 
Sec. N-6. 24-A MRSA §6908, sub-§2, ~ 
is enacted to read: 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT "A " 
to H.P. 1322, L.D. 1890 
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 participating in the Dirigo Health Program; and 
(5) A comparison of actual enrollees in the Dirigo Health Program to the 
projected enrollees. 
Sec. N-7. 24-A MRSA §6913, as amended by PL 2005, c. 683, Pt. A, §§43 and 
44, is repealed. 
Sec. N-S. 24-A MRSA §6913-A is enacted to read: 
§6913-A. Surcharge 
1. Definitions. As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings. 
A. "Hospital" means an acute care health care facility: 
(I) With permanent inpatient beds planned, organized, operated and maintained 
I 
to offer for a continuing period of time facilities and services for the diagnosis 
and treatment of illness, injury and defonnity; 
(2) With a governing board and an organized medical staff offering continuous 
24-hour professional nursing care; 
(3) With a plan to provide emergency treatment 24 hours a day and including 
other services as defined in rules of the Department of Health and Human 
Services relating to licensure of general and specialty hospitals; and 
(4) That is licensed under Title 22, chapter 405 as a general hospital, specialty 
hospital or critical access hospital. 
For purposes of this paragraph, "hospital" does not include a nursing home or a 
publicly owned specialty hospital. 
B. "Payments subject to surcharge" means all amounts paid, directly or indirectly, by 
surcharge payors to hospitals for all hospital-only health services on or after the 
effective date of this paragraph, except that "payments subject to surcharge" does not 
include payments with respect to accidental injury, specified disease, hospital 
indemnity, dental, vision, disability income, long-term care, Medicare supplement or 
other limited benefit health insurance. "Payments subject to surcharge" may exclude 
amounts established in rules adopted by the board for which the costs and efficiency 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
of billing a surcharge payor or enforcing collection of the surcharge from a surcharge 
payor would not be cost-effective. For the purposes of this paragraph, a hospital's 
hospital-only services include any item that is listed on the hospital's Medicare cost 
report as a subprovider and submitted to the Maine Health Data Organization 
pursuant to Title 22, chapter 1683, such as a psychiatric unit or rehabilitation unit, 
and do 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. Rules adopted pursuant to this 
paragraph are routine technical rules as defined in Title 5, chapter 375, subchapter 
2-A. 
C. 
"Publicly owned specialty hospital" means a publicly owned hospital that is 
primarily engaged in providing psychiatric services for the diagnosis, treatment and 
care of persons with mental illness and that is licensed as a specialty hospital by the 
Department of Health and Human Services. 
D. "Surcharge payor" means an individual or entity that pays for or arranges for the 
purchase of health care services provided by hospitals, except that "surcharge payor" 
does not include: 
(1) Any governmental entity that pays for health care services provided under 
the Medicare program or Medicaid program, or beneficiaries or recipients under 
those programs except that the Dirigo Health Program is a surcharge payor; 
(2) 
Any federal governmental entity that pays for health care services, or 
beneficiaries or recipients under those programs; 
(3) An insurance company or other entity for health care services provided 
pursuant to the Maine Workers' Compensation Act of 1992; or 
(4) An insurance company subject to chapter 39 for lines of insurance other than 
health insurance. 
2. Surchar~e. Beginning July 1,2008, hospitals shall assess a surcharge of 1.8% on 
all payments subject to surcharge and the total amount of the surcharge may not exceed 
$29,000,000 except as provided in paragraph B. The surcharge must be paid by all 
surcharge payors. The surcharge is distinct from any other amount paid by a surcharge 
payor for the services of the hospital. 
A. If, by May 30, 2008, the board determines that the surcharge percentage is not 
adequate to yield $29,000,000, the board may redetermine the surcharge percentage 
in order to ensure that the amount collected is not 1 % more or less than the surcharge 
amount by the end of that fiscal year. The board may redetermine the surcharge 
percentage by January 1 st of each subsequent year in order to ensure that the amount 
collected is not 1 % more or less than the surcharge amount by the end of that fiscal 
year. In each redetermination of the surcharge percentage, the board shall divide the 
surcharge amount by the projected annual aggregate payments subject to surcharge. 
The board shall use the most recent net patient service revenue data available from 
the Maine Health Data Organization to calculate the projected annual aggregate 
payments subject to surcharge. 
The board shall incorporate all adjustments by 
prospective adjustment rather than retrospective payments or assessments. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
I 
B. The board may adjust the surcharge amount each fiscal year by an amount not to 
exceed the product of: 
(1) The index of inflation multiplied by 1.5: and 
(2) The rate of growth in member months in DirigoChoice in the preceding fiscal 
year. 
For the purposes of this paragraph, "index of inflation" means the rate of increase in 
medical care costs for a section of the United States that includes this State for the 
most recent 12-month period immediately preceding the date of the adjustment for 
which data are available, published monthly by the United States Department of 
Labor, Bureau of Labor Statistics. 
3. 
Billin~. Beginning July 1, 2008, each hospital shall bill a surcharge payor an 
amount equal to the surcharge described in subsection 2 as a separate and identifiable 
amount distinct from any amount billed to or paid by a surcharge payor for hospital 
services. Each surcharge payor shall pay the surcharge amount to Dirigo Health. which 
amount must be pooled with other revenues of Dirigo Health in the Dirigo Health 
Enterprise Fund estab lished in section 6915. 
4. 
Surcharge payor's liability. 
The board shall specify by rule appropriate 
mechanisms that provide for determination and payment of a surcharge payor's liability, 
including requirements for data to be submitted by surcharge payors and hospitals. A 
surcharge payor's liability, in the case of a transfer of ownership, must be assumed by the 
successor in interest to the surcharge payor. 
5. Failure to pay surcharge payments. The board shall establish by rule an 
appropriate mechanism for enforcing a surcharge payor's liability to the Dirigo Health 
Enterprise Fund in the event that a surcharge payor does not make a scheduled payment 
under subsection 3, except that the board, for the purpose of administrative simplicity, 
may establish threshold liability amounts below which enforcement may be modified or 
waived. Such an enforcement mechanism must include an assessment of interest on the 
unpaid liability at a rate not to exceed an annual percentage rate of 18% and late fees or 
penalties at a rate not to exceed 5% per month. 
6. Demonstration of recovery of surcharge payments through reduction in bad 
debt and charity care. In accordance with the requirements of this subsection, every 
health insurance carrier and provider shall demonstrate that best efforts have been made 
to ensure that a carrier has recovered surcharge payments made pursuant to this section 
through negotiated reimbursement rates that reflect providers' reductions or stabilization 
in the cost of bad debt and charity care. 
A health insurance carrier shall use best efforts to ensure health insurance premiums 
reflect any such recovery of surcharge payments as those surcharge payments are 
reflected through incurred claims experience in accordance with subsection 7. 
7. Demonstration of offset. As provided in sections 2736-C, 2808-B and 2839-B, 
the claims experience used to determine any filed premiums or rating formula must 
reasonably reflect. in accordance with accepted actuarial standards, any reduction or 
avoidance of bad debt and charity care costs to providers in this State. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT " ~" to H.P. 1322, L.D. 1890 
Sec. N-9. 24-A MRSA §6915, as amended by PL 2005, c. 386, Pt. D, §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 slWiflgS offset payments made pursuant to former section 6913 or section 
6913-A, revenues pursuant to Title 36, sections 4385 and 4403-A and any funds received 
from any public or private source. The fund may be used by Dirigo Health to exercise its 
powers and duties pursuant to this chapter. The fund may not lapse, but must he carried 
forward to carry out the purposes of this chapter. Beginning July 1,2008 and annually 
thereafter, Dirigo Health shall transfer 24% of the funds credited to the fund from section 
6913-A and Title 36, sections 4385 and 4403-A to the Maine Individual Reinsurance 
Program established in chapter 54. 
Sec. N-I0. 36 MRSA §4365, as amended by PL 2005, c. 457, Pt. AA, §l 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 +00 137.5 mills for each cigarette. Payment of the tax is 
evidenced by the affixing of stamps to the packages containing the cigarettes. 
Sec. N-ll. 36 MRSA §4365-F, as enacted by PL 2005, c. 457, Pt. AA, §3 and 
affected by §8, is repealed. 
Sec. N-12. 36 MRSA §4365-G is enacted to read: 
§4365-G. Application of cigarette tax rate increase effective October 1,2007 
The following provisions apply to cigarettes held for resale on October 1, 2007. 
1. Stamped rate. Cigarettes stamped at the rate of 100 mills per cigarette and held 
for resale after September 30. 2007 are subject to tax at the rate of 137.5 mills per 
cigarette. 
2. Liability. A person possessing cigarettes for resale is liable for the difference 
between the tax rate of 137.5 mills per cigarette and the tax rate of 100 mills per cigarette 
in effect before October 1, 2007. Stamps indicating payment of the tax imposed by this 
section must be affixed to all packages of cigarettes held for resale as of October 1, 2007. 
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 October 1, 2007 
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 137.5 mills per 
cigarette placed in vending machines before October 1, 2007. 
4. Payment. Payment of the tax imposed by this section must be made to the 
assessor by January 1, 2007, accompanied by forms prescribed by the assessor. 
COMMITTEE AMENDMENT 
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COMMITTEE AMENDMENT" A" to H.P. 1322, L.D. 1890 
Sec. N-13. 36 MRSA §4366-A, sub-§2, as amended by PL 2005, c. 622, §25 and 
affected by §34, is further amended to read: 
2. Provided to sellers. The State Tax Assessor shall provide stamps suitable to be 
affixed to packages of cigarettes as evidence of the payment of the tax imposed by this 
chapter. The assessor may permit a licensed distributor to pay for the stamps within 30 
days after the date of purchase, if a bond satisfactory to the assessor in an amount not less 
than 50% of the sale price of the stamps has been filed with the assessor conditioned upon 
payment for the stamps. Such a distributor may continue to purchase stamps on a 30-day 
deferral basis only if it remains current with its cigarette tax obligations. The assessor 
may not sell additional stamps to a distributor that has failed to pay in full within 30 days 
for stamps previously purchased until such time as the overdue payment is received. The 
assessor shall sell cigarette stamps to licensed distributors at the following discounts from 
their face value: 
A. 
For stamps at the face value of37 mills sold through September 30,2001,2.5%; 
B. 
For stamps at the face value of 50 mills sold prior to July 1, 2002, 2.16%; 
C. 
For stamps at the face value of 50 mills sold on or after July 1,2002,2.03%; aH6 
D. 
For stamps at the face value of 100 mills, 1.15%.; and 
E. For stamps at the face value of 137.5 mills, 0.88%. 
Sec. N-14. 36 MRSA §4385 is enacted to read: 
§4385. Applications of revenues 
1. Credited to suspense account. Revenues derived from the tax equal to 37.5 mills 
imposed on cigarettes pursuant to section 4365 must be credited to a General Fund 
suspense account. 
2. Transfers in 2008 and thereafter. Except as provided in subsection 3, on or 
before the last day of each month of calendar year 2008 and each calendar year thereafter, 
the State Controller shall transfer the revenues credited to the suspense account under 
subsection 1 during the month to the Dirigo Health Enterprise Fund established by Title 
24-A, section 6915. 
3. Transfer to General Fund. The State Controller shall transfer into the General 
Fund the revenues necessary to maintain the level of cigarette tax revenue at the level that 
was budgeted for the General Fund in fiscal year 2006-07. Beginning in fiscal year 
2007-08, the State Controller shall transfer to the General Fund the revenues necessary to 
maintain the level of cigarette tax revenue in the previous year less 3%. The Treasurer of 
State shall annually review the recommendations of the Revenue Forecasting Committee 
to determine whether any change in the reduction rate is required and, if so, shall change 
the rate accordingly. 
Sec. N-15. 36 MRSA §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 1.0% 78% of the wholesale sales price beginning 
October 1, ~ 
2007. 
COMMITTEE AMENDMENT 
u ~~. 
p' 
COMMITTEE AMENDMENT" Ii, to H.P. 1322, L.D. 1890 
Sec. N-16. 36 MRSA §4403-A is enacted to read: 
§4403-A. Applications of revenues 
1. Credited to suspense account. Revenues derived from the tax equal to 58% of 
the wholesale sales price of tobacco products pursuant to section 4403, subsection 2 must 
be credited to a General Fund suspense account. 
2. Transfers in 2008 and thereafter. On or before the last day of each month of 
calendar year 2008 and each calendar year thereafter, the State Controller shall transfer 
100% of the revenues credited to the suspense account under subsection I during the 
month to the Dirigo Health Enterprise Fund established by Title 24-A, section 6915. 
Sec. N-17. Savings offset payments calculated prior to effective date. 
Notwithstanding that section of this Part that repeals the Maine Revised Statutes, Title 
24-A, section 6913, any savings offset payment calculated and required under former 
Title 24-A, section 6913 prior to the effective date of this Part is due and payable in the 
same manner and subject to the same procedures set forth in former Title 24-A, section 
6913. 
PART 0 
Sec. 0-1. 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 eKeessive not reasonable and necessary have the 
burden of establishing that the rates are eKeessive not reasonable and necessary. The 
burden of proving that rates are adequate, not unfairly discriminatory and in 
compliance with the requirements of former section 6913 and section 6913-A 
remains with the insurer. 
Sec. 0-2. 24-A MRSA §2S0S-B, sub-§2-A, ~A, as enacted by PL 2003, c. 469, 
Pt. E, § 16, is amended to read: 
A. 
Every filing must state the effective date of the filing. Every filing must be 
made not less than 60 days in advance of the stated effective date, unless the 60-day 
requirement is waived by the superintendent. The effective date may be suspended 
by the superintendent for a period of time not to exceed 30 days. lR the ease af a 
filing that meets the eriteria in sebseetian 2 B, paragraph :6, the seperintendent ffill)' 
suspend the effeetiye date fur a langer peri ad nat to eKeeed 30 days fram the date the 
earrier satisfactorily responas to an)' reasonable aiSeO'/6f)' reqeests. 
Sec. 0-3. 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 offset payment pursuant to 
COMMITTEE AMENDMENT 
\ \"J.b. 
,>,. 
II 
COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
subsection 2-B, paragraph D and former section 6913 and section 6913-A for rates 
effective before July 1,2005. 
Sec. 0-4. 24-A MRS A §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 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. 
PARTP 
Sec. P-l. Appropriations and allocations. The following appropriations and 
allocations are made. 
ADMINISTRATIVE AND FINANCIAL SERVICES, DEPARTMENT OF 
Revenue Services - Bureau of 0002 
Initiative: Provides funds for Maine Revenue Services administrative costs associated 
with the cigarette and other tobacco products tax increase. 
GENERAL FUND 
All Other 
GENERAL FUND TOTAL 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
DEPARTMENT TOTALS 
GENERAL FUND 
DEPARTMENT TOTAL - ALL FUNDS 
2007-08 
$88,000 
$88,000 
2007-08 
$88,000 
$88,000 
2008-09 
$0 
$0 
2008-09 
$0 
$0 
DIRIGOHEALTH 
Dirigo Health Fund 0988 
Initiative: Allocates funds for Dirigo Health costs to be funded by a hospital surcharge 
with a share of the revenue resulting from the surcharge also to be transferred to help 
fund the Maine Individual Reinsurance Program. 
COMMITTEE AMENDMENT 
I 
COMMITTEE AMENDMENT " ~" to H.P. 1322, L.D. 1890 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
Dirigo Health Fund 0988 
2007-08 
$0 
2008-09 
$22,040,000 
$0 
$22,040,000 
Initiative: Deallocates funds for Dirigo Health costs that were funded by the savings 
offset payment. 
II 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
Dirigo Health Fund 0988 
2007 -08 
2008-09 
$0 
($13,720,000) 
$0 
($13,720,000) 
Initiative: Allocates funds for Dirigo Health costs to be funded by a cigarette and other 
tobacco products tax increase with a share of the revenue resulting from the cigarette tax 
increase also to be transferred to help fund the Maine Individual Reinsurance Program. 
DIRIGO HEALTH FUND 
All Other 
DIRIGO HEALTH FUND TOTAL 
DIRIGO HEALTH 
DEPARTMENT TOTALS 
DIRIGO HEALTH FUND 
DEPARTMENT TOTAL-ALL FUNDS 
2007-08 
2008-09 
$35,649,622 
$36,491,247 
$35,649,622 
$36,491,247 
2007-08 
2008-09 
$35,649,622 
$44,811,247 
$35,649,622 
$44,811,247 
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF 
Insurance - Bureau of 0092 
Initiative: Allocates funds for one Managing Insurance Examiner position, one Insurance 
Actuarial Assistant position and related costs related to implementation and management 
of the Maine Individual Reinsurance Program and other requirements of the Act. 
COMMITTEE AMENDMENT 
., 
1'J.~. 
V'· 
COMMITTEE AMENDMENT .. A 
"to H.P. 1322, L.D. 1890 
OTHER SPECIAL REVENUE FUNDS 
2007-08 
2008-09 
POSITIONS - LEGISLATIVE COUNT 
2.000 
2.000 
Personal Services 
$120,757 
$165,657 
All Other 
$28,102 
$17,622 
OTHER SPECIAL REVENUE FUNDS TOTAL 
$148,859 
$183,279 
Insurance - Bureau of 0092 
Initiative: Allocates funds for consulting services needed on a one-time basis to 
implement provisions of this Act. 
I I 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
Maiue Individual Reinsurance Program Z055 
2007·08 
$125,000 
$125,000 
2008-09 
$0 
$0 
Initiative: Allocates funds for the costs of the Maine Individual Reinsurance Program. 
MAINE INDIVIDUAL REINSURANCE 
2007-08 
2008-09 
PROGRAM FUND 
All Other 
$0 
$18,483,552 
MAINE INDNIDUAL REINSURANCE PROGRAM 
$0 
$18,483,552 
FUND TOTAL 
PROFESSIONAL AND FINANCIAL 
REGULATION, DEPARTMENT OF 
DEPARTMENT TOTALS 
2007-08 
2008-09 
OTHER SPECIAL REVENUE FUNDS 
$273,859 
$183,279 
MAINE INDIVIDUAL REINSURANCE 
$0 
$18,483,552 
PROGRAM FUND 
DEPARTMENT TOTAL - ALL FUNDS 
$273,859 
$18,666,831 
SECTION TOTALS 
2007-08 
2008-09 
COMMITTEE AMENDMENT 
\\ t+. \. 
COMMITTEE AMENDMENT" A" to H.P. 1322. L.D. 1890 
GENERAL FUND 
OTHER SPECIAL REVENUE FUNDS 
DIRIGO HEALTH FUND 
MAINE INDIVIDUAL REINSURANCE 
PROGRAM FUND 
SECTION TOTAL - ALL FUNDS 
SUMMARY 
This amendment replaces the bill. 
$88,000 
$273,859 
$35,649,622 
$0 
$36,011,481 
$0 
$183,279 
$44,811,247 
$18,483,552 
$63,478,078 
Part A requires carriers to offer a wellness program in all small group and group 
health plans. The Part requires that carriers offer enrollees participating in the wellness 
program a financially tangible benefit, including a premium discount. The Part also 
requires that carriers report annually to the Superintendent of Insurance about the 
wellness programs offered to enrollees and that the superintendent report aggregate data 
from carriers to the Legislature and to the Maine Quality Forum. Part A also requires all 
individual health plans to provide coverage for tobacco cessation treatment. 
Part B requires that all insurers in the individual market offer a plan that includes a 
$1,000 deductible, a prescription drug benefit not subject to a deductible and the option of 
no cap on the lifetime maximum benefit. 
Part C directs the Superintendent of Insurance to report the results of the 
consensus-based rule-making process related to possible amendments to Bureau of 
Insurance Rule Chapter 850. The Part also permits the Joint Standing Committee on 
Insurance and Financial Services to submit legislation to the Second Regular Session of 
the 123rd Legislature. 
Part 0 establishes a reinsurance mechanism for the individual health insurance 
market. The Part provides reimbursement to carriers offering individual health plans for 
80% of claims incurred between $50,000 and $200,000 for health plans as determined by 
the superintendent. 
Part E modifies the community rating band in the individual market to permit the 
variation of rates below the community rate by 40% on the basis of age. This Part 
prohibits rating variations on the basis of geographic area and occupation or industry. 
Rates may not vary above the community rate by more than 20%. 
Part F requires the Superintendent of Insurance to study the impact of merging the 
individual and small group markets. 
Part G makes changes to the standards for the review of individual and small group 
health insurance rate filings. This Part also prohibits carriers from increasing rates to 
account for the hospital surcharge paid to support Dirigo Health unless the carrier has a 
loss ratio of 83% or higher for its individual health plans. Small group carriers are 
prohibited from increasing their rates. 
COMMITTEE AMENDMENT 
v\ fIf. t. 
" 
COMMITTEE AMENDMENT" A " 
to H.P. 1322, L.D. 1890 
Part H clarifies that rate filings and supporting infonnation are public records subject 
to disclosure and requires the Superintendent of Insurance to review Bureau of Insurance 
Rule Chapter 945 to identify any gaps in data filed by insurance companies to improve 
transparency in developing premium rates. Part H also requires carriers in the individual 
market to have a loss ratio of 78% and to refund the excess amount to policy holders. 
Part I 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 Program 
pursuant to Title 24-A, chapter 54 on the overall health insurance market, including the 
number of carriers, the types of products offered and the number of individuals enrolled 
in health plans. This Part also requires the Governor's Office of Health Policy and 
Finance to study the impact of an individual and employer mandate in conjunction with 
the Department of Labor. 
Part J allows Dirigo Health to administer grants and other subsidies to strengthen the 
State's health care quality improvement infrastructure. 
Part K allows Dirigo Health to subsidize approved plans provided by multiple 
carriers. This Part also penn its eligible businesses to elect to treat as eligible employees 
who work at least 10 hours per week for coverage under their employer's DirigoChoice 
plan. This Part allows Dirigo Health to assist employers in establishing payroll deduction 
systems that would help employees purchase health coverage with pre-tax dollars. 
Part L makes permanent, beginning on or after July 1,2008, 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 which 
otherwise would expire. 
Part M authorizes the Board of Directors of Dirigo Health to develop a demonstration 
project to provide a targeted DirigoChoice health coverage plan to meet the needs of 
temporary and seasonal workers and long-tenn care employers and their employees and 
that allows multiple employers to contribute monthly premium assistance to temporary 
and seasonal workers and direct-care employees eligible to enroll in DirigoChoice as an 
individual. 
Part N repeals the savings offset payment. The Part establishes a 1.8% surcharge on 
hospital bills. The Part increases the tax on cigarettes by 75 cents per pack and equalizes 
the rate of tax imposed on all tobacco products. The Part requires that these revenues be 
credited to the Dirigo Health Enterprise Fund to support the Dirigo Health Program 
except that 24% of the revenues must be transferred to the Maine Individual Reinsurance 
Program. 
Part 0 changes cross-references. 
Part P adds an appropriations and allocations section to the bill. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Revised: 06119/07 ;tb;'ac:.. 
LD 1890 
LR 2620(02) 
An Act To Make Health Care Affordable, Accessible and Effective for All 
Fiscal Note for Bill as Amended by Committee Amendment" A " 
Committee: Insurance and Financial Services 
Net Cost (Savings) 
General Fund 
Appropriations/Allocations 
General Fund 
Other Special Revenue Funds 
Dirigo Health Fund 
Maine Individual Reinsurance 
Program Fund 
Revenue 
General Fund 
Other Special Revenue Funds 
Dirigo Health Fund 
Transfers 
Fiscal Note Required: Yes 
Fiscal Note 
2007-08 
($1,036,716) 
$88,000 
$273,859 
$35,649,622 
$0 
$1,124,716 
$60,443 
$35,649,622 
2008-09 
($1,513,335) 
$0 
$183,279 
$44,811,247 
$18,483,552 
$1,513,335 
$81,328 
$63,294,799 
Projections 
2009-10 
($1,499,884) 
$0 
$192,390 
$24,272,863 
$18,496,694 
$1,499,884 
$82,272 
$42,769,557 
Projections 
2010-11 
($1,488,169) 
$0 
$202,002 
$24,319,644 
$18,511,467 
$1,488,169 
$81,630 
$42,831, III 
Dirigo Health Fund 
$0 
($18,483,552) 
($18,496,694) 
($18,511,467) 
Maine Individual Reinsurance 
Program Fund 
Fiscal Detail and Notes 
$0 
$18,483,552 
$18,496,694 
$18,511,467 
This bill increases General Fund revenue by $1,124,716 in fiscal year 2007-08 and $1,513,335 in fiscal year 2008-09 
due to an increase in sales tax resulting from the increase in the tobacco taxes. This bill also includes a General Fund 
appropriation of $88,000 for the administrative costs associated with the cigarette and tobacco product tax increases. 
LR2620(02) - Fiscal Note - Page 1 of2 
This bill would eliminate the Saving Offset Payment, one of the funding sources for the Dirigo Health Program, 
beginning with the assessment effective July I, 2008, and replace this revenue with a hospital surcharge and the 
increase in tobacco taxes. For the purposes of this fiscal note, the baseline assumption for future year Saving Offset 
Payments is the $34.3 million Saving Offset Payment assessed for the year beginning July 1,2007. For the first year 
of the Saving Offset Payment elimination (fiscal year 2008-09) only 40% of the new Saving Offset Payment is 
assumed to be collected, and therefore lost, in that year. 
The bill would create the Maine Individual Reinsurance Program within the Department of Professional and Financial 
Regulation. The program is to be funded by a transfer of24% of Dirigo's share of the revenue generated by the 
tobacco tax increase and the hospital surcharge. 
The bill also includes an Other Special Revenue Funds allocation for Bureau ofInsurance costs related to 
implementation and management of the reinsurance program and other requirements of the bill. This includes the costs 
of a Managing Insurance Examiner position, an Insurance Actuarial Assistant position, related administrative costs, 
and for consulting services. 
Projections 
Projections 
Dirigo Health Fund Summary 
2007-08 
2008-09 
2009-10 
2010-11 
Revenue Changes: 
Elimination of the Savings Offset Payment 
$0 
($13,720,000) 
($34,300,000) 
($34,300,000) 
Hospital Surcharge 
$0 
$29,000,000 
$29,000,000 
$29,000,000 
Tobacco Tax Increase 
$35,649,622 
$48,014,799 
$48,069,557 
$48,131, III 
Subtotal Revenue Changes 
$35,649,622 
$63,294,799 
$42,769,557 
$42,831,111 
Transfers: 
To Reinsurance Program from Hospital Surcharge 
$0 
($6,960,000) 
($6,960,000) 
($6,960,000) 
To Reinsurance Program from Tobacco Tax 
$0 
($11,523,552) 
($11,536,694 ) 
($11,551,467) 
Net Change in Dirigo Allocation 
$35,649,622 
$44,811,247 
$24,272,863 
$24,319,644 
LR2620(02) - Fiscal Note - Page 2 of2