An Act To Establish a Single-payor Health Care System
Maine Legislature, Session 123, LD 1072
Committee: Insurance and Financial Services
Sponsors: BEAUDOIN, SCHNEIDER, ADAMS, GROSE, WALCOTT
Amends: 2 MRSA §6-F, 24-A MRSA §2185-A, 36 MRSA §4365, 36 MRSA §4365-F, 36 MRSA §4365-G

Legislative Document 
No. 1072 
H.P.790 
House of Representatives, March 6, 2007 
An Act To Establish a Single-payor Health Care System 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
Presented by Representative BEAUDOIN of Biddeford. 
Cosponsored by Senator SCHNEIDER of Penobscot and 
17/~ 
/J7.71!~ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: ADAMS of Portland, GROSE of Woolwich, WALCOTT of Lewiston. 
Printed nn recycled paper 
Be it enacted by the People of the State of Maine as follows: 
PART A 
Sec. A-I. 22 MRSA c. 106 is enacted to read: 
CHAPTER 106 
ACCESS TO AFFORDABLE HEALTH CARE 
SUBCHAPTER 1 
GENERAL PROVISIONS 
§371. Definitions 
As used in this chapter, unless the context otherwise indicates, the following terms 
have the following meanings. 
1. Aeency. "Agency" means the Maine Health Care Agency established by section 
375. 
2. Council. "Council" means the Maine Health Care Council established by section 
377. 
3. Fund. "Fund" means the Maine Health Care Trust Fund established by section 
374, subsection 1. 
4. Global budeet. "Global budget" means a statewide aggregate amount budgeted 
for the provision of all health care services or for any sector of health care services. 
5. Open plan. "Open plan" means the benefit delivery system for the Maine Health 
Care Plan that is open to all plan members and all participating providers, as specified in 
rules adopted pursuant to section 372, subsection 4. 
6. Oreanized delivery system. "Organized delivery system" means an organization 
that provides or contracts for a complete range of health care services, as specified in 
rules adopted pursuant to section 372, subsection 4, paragraph A. 
7. Participatine provider. "Participating provider" means a provider approved for 
the delivery of health care services pursuant to section 372, subsection 4. 
8. Plan. "Plan" means the Maine Health Care Plan established by section 372. 
9. Provider. "Provider" means any person, organization, corporation or association 
that provides health care services and is authorized to provide those services under the 
laws of this State. 
"Provider" includes persons and entities that provide healing, 
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treatment and care for those relying on a recognized religious method of healing as 
provided for in the federal Social Security Act, Title XVIII and permitted under state law. 
10. Resident. "Resident" means a person who resides within the State as defined by 
rules adopted by the agency pursuant to section 376, subsection I. 
11. Small Business Hardship Fund. "Small Business Hardship Fund" means the 
fund created by section 374, subsection 1, paragraph A as part of the Maine Health Care 
Trust Fund. 
SUBCHAPTER 2 
ENSURING ACCESS TO HEALTH CARE 
§372. Maine Health Care Plan 
II 
The Maine Health Care Plan is established to provide security through high-quality, 
affordable health care for the people of the State. 
The plan must offer health care 
services beginning July I, 2008, and the agency shall administer and oversee the plan in 
accordance with this chapter. 
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1. Goals of Maine Health Care Plan. The plan has the following goals: 
A. To eliminate income-based disparity in the health care status of citizens of the 
State; 
B. To reduce the rate of growth in the cost of health care services; 
C. To reduce waste and inefficiency in the administration of health care services and 
health insurance; 
D. To increase access to primary and preventive health care services; 
E. 
To reduce the number of excessively expensive health care procedures and 
eliminate unnecessary and harmful procedures; 
F. 
To promote cooperation among communities and providers of health care, to 
eliminate cost-accelerating practices, to coordinate the delivery of care and use of 
technology and equipment and to increase quality and cost efficiencv: 
y .. To distributeJhe costs of health care fairlv and equitably; 
H-'-.To simplifv the heaJth c~re sYstem for conslJmeI~J?usinesses and Rrovider~ 
L_IQ ensure-2IQvidt:r'>.~inical freedom to treat patients based on healthcare need'>. 
~ldS.Iitcria: and 
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L-1~Q~nsure accountub.ilLtyjr:Lall aSJl~cts of the health care system to promote public 
confi.ftt:JJf~_E.D9 control of costs, 
2. Eligibility for Maine Health Care Plan. In accordance with this subsection.,., 
residents and nonresidents are eligi!Jle to receive covered health care services from 
participating providers under the plan within this State if the service is necessaIY-Q! 
appropriate for the prevention, diagnosis or treatment of, or maintenance or rehabilitation 
following, injury, disability or disease. The agency shall adopt rules regarding payment 
of premium, application for a plan card and membership in the plan. Rules adopted 
pursuant to this subsection are routine technical rules as defined in Title 5, chapter 375, 
subchapter 2-A. The rules must provide for at least the following. 
A. Each resident of the State is eligible to receive health care under the plan and may 
enroll in the plan. 
B. 
A nonresident of the State who maintains significant contact with the State, 
including employment or self-employment within the State or attendance at a college, 
university or other institution of higher education in the State, is eligible to receive 
health care under the plan. 
Eligibility extends to a person qualifying under this 
paragraph and to that person's spouse and dependents. The agency shall adopt rules 
establishing criteria for eligibility for nonresidents and determine the premium to be 
paid by them and the method of payment. 
C. A plan member who ceases to be eligible for the plan may elect, within 60 days of 
the event that causes ineligibility, to continue participation in the plan for a period of 
up to 18 months. For the purposes of this paragraph, a plan member is considered to 
have lost eligibility due to disability if the member could be determined disabled 
under the federal Social Security Act, Title II or Title XVI. The agency shall ensure 
that plan members who become ineligible for enrollment in the plan are promptly 
notified of the provisions of this paragraph. The agency shall adopt rules establishing 
the premium to be paid by persons eligible under this paragraph and the method of 
payment. 
D. To establish eligibility, each person must apply for a plan card, pay to the fund 
the premium determined applicable pursuant to section 374, subsection 1, paragraph 
B and satisfy the application requirements established by the agency. 
3. Health care benefits. As provided in this subsection, the plan must provide 
coverage for health care services from participating providers within this State if those 
services are necessary or appropriate for the prevention, diagnosis or treatment of, or 
maintenance or rehabilitation following, injury, disability or disease. The agency shall 
adopt rules regarding provision of the following covered health care services: 
A. Hospital services; 
B. Medical and other professional services furnished by participating providers; 
C. Laboratory tests and imaging procedures; 
D. 
Home health care for persons requiring services performed by or under the 
supervision of professional or technical personnel, including, but not limited to, home 
care for acute illness, personal care attendant services and the medical component of 
home care for chronic illness. Notwithstanding any other provision of law, the plan 
may use copayments for permanent care services; 
E. Rehabilitative services for persons receiving therapeutic care; 
F. Prescription drugs and devices. Unless the prescribing practitioner certifies that a 
more expensive drug is medically necessary, the plan may cover only part of the cost 
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of a drug dispensed in a package or form of dosage or administration when the 
agency determines that a less expensive package or form of dosage or administration 
is available that is pharmaceutically equivalent in its therapeutic effect. If a plan 
member chooses to purchase a more expensive drug under this paragraph, the plan 
member is responsible for paying the amount not covered by the plan; 
G. Mental health services; 
H. Substance abuse treatment; 
1. Primary and acute dental services; 
J. 
Vision appliances, including lenses, frames and contact lenses, according to a 
schedule established by the agency; 
K. Medical supplies and durable medical equipment and selected assistance devices; 
L. Hospice care; and 
M. Health care services payable pursuant to Title 39-A for all employees whose date 
of injury is on or after July 1, 2008. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
4. Benefit delivery. Covered health care services must be provided to plan members 
by the participating providers of their choice through organized delivery systems or the 
open plan. The delivery of covered health care services to plan members is subject to the 
provisions of this subsection. The agency shall adopt rules regarding benefit delivery by 
the plan that include, but are not limited to, the following. 
A. Organized delivery systems authorized by the agency may provide health care 
services to plan members. 
B. The open plan is available to all plan members and to all participating providers. 
C. The plan must pay for health care services provided to plan members while they 
are out of the State. The plan member must have been out of the State temporarily 
for reasons other than to obtain the health care services, or the member must have 
obtained the health care services out of the State for compell ing reasons related to the 
suitability of the services, the nature of the condition and personal circumstances. 
The agency shall establish and operate a plan to pay for health care services provided 
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to plan members while they are out of the State. The payments must be made at the 
rates established by the agency for comparable services provided by the plan in the 
State. Charges in excess of the payment rates established in accordance with this 
paragraph are the responsibility of the plan member. 
D. The plan must pay cash benefits to a provider of health care services or to a plan 
member for a reasonable amount charged for medically necessary emergency health 
care services obtained by a plan member from a provider who is not a participating 
provider. 
E. Copayments or deductibles do not apply to health care services provided through 
the plan, except that, to encourage the use of the most appropriate and cost-effective 
mode of service, an organized delivery system may require reasonable payments by a 
plan member if payment is approved by the agency and does not substantially 
interfere with access to needed health care services. 
F. Accountability to the public of the open plan and organized delivery systems must 
be ensured in order to promote public confidence in the health care delivery system 
and awareness of the costs of care. 
G. Flexible enrollment and transfer processes that preserve plan member confidence 
and ensure that health care needs are met must be provided. 
H. An opportunity for negotiation of fair rates of compensation with participating 
providers in the open plan and organized delivery systems and negotiation with 
pharmaceutical companies for similarly classified pharmaceuticals must be provided. 
I. A program to expand services to underserved rural and low-income communities 
must be established. 
J. Mechanisms must be developed to provide incentives to participating providers in 
the open plan and to organized delivery systems for additional savings that do not 
compromise the quality of health care. 
Rules adopted pursuant to this subsection are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
5. Provider requirements. Participating providers, the open plan and organized 
delivery systems may not charge a plan member or a 3rd party for covered health care 
services and may not charge rates in excess of the reimbursement levels set by the 
agency. A participating provider of health care services, the open plan and organized 
delivery systems may not refuse to provide services to a plan member on the basis of 
health status, medical condition, previous insurance status, race, color, creed, age, 
national origin, citizenship status, gender, sexual orientation, disability, marital status or 
arrest record except as appropriate to the provider's professional specialization or other 
medically appropriate circumstances. 
6. Provision of information bv participatinl! providers. A participating provider 
shall make information available to the agency and permit examination of its records by 
the agency as necessary for the purposes of this section and section 374. 
7. Organized delivery system requirements. For fiscal year 2008-09, organized 
delivery systems must have target loss ratios of 88% and caps on administrative costs of 
10%. For fiscal year 2009-10, organized delivery systems must have target loss ratios of 
90% and caps on administrative costs of 8%. For each succeeding fiscal year, the loss 
ratio must increase 1 % and the administrative cost cap must decrease 1 % until the agency 
determines that the greatest efficiency has been reached. 
8. Role of other health care programs. Until the agency determines otherwise, the 
plan is supplemental to all coverage available to a plan member from another health care 
program, including, but not limited to, the Medicare program of the federal Social 
Security Act, Title XVIII; the Medicaid program of the federal Social Security Act, Title 
XIX; the Civilian Health and Medical Program of the Uniformed Services, 10 United 
States Code, Sections 1071 to 1106; the federal Indian Health Care Improvement Act, 25 
United States Code, Sections 1601 to 1682; the statewide plan provided through Dirigo 
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Health Insurance pursuant to Title 24-A, chapter 87; other 3rd-party payors who may be 
billable for health care services; and any state and local health care programs, including, 
but not limited to, workers' compensation and employers' liability insurance, pursuant to 
former Title 39 and Title 39-A. Health care services billed to 3rd-party payors other than 
the plan must be paid for by those programs, and coverage under the plan is supplemental 
to that coverage. A plan member who receives health care services under another health 
care program or from a 3rd-party payor to which the plan is supplemental shall pay a 
premium to the fund in proportion to the health care benefits available to the plan 
member under the plan. 
SUBCHAPTER 3 
ENSURING THE QUALITY, AFFORDABILITY AND EFFICIENCY OF 
HEALTH CARE 
§373. Quality; affordability; efficiency; health planning 
The agency shall undertake the following duties to ensure the quality, affordability, 
efficiency and planning ofheaIth care for the citizens of the State. 
1. Quality of care. The agency shall establish a quality assurance program and shall 
adopt rules to implement that program. Rules adopted pursuant to this subsection are 
routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. The program 
must include, but is not limited to: 
A. Operation of the plan; 
B. 
Use of covered health care servIces of participating and nonparticipating 
providers; 
C. Evaluation of the performance of participating providers; 
D. Standards and continuity of care; 
E. A plan for increased delivery of preventive and primary care; 
F. Access to information and data for the agency; 
G. A plan to ensure that the open plan and organized delivery systems address public 
health needs; 
H. Plan member involvement in policy decisions; am1 
L~'.l.ffficient complaint resolution process regarding quality of care and utilization 
?nd rate control~ 
2. 
AfIordability of care. The agency shall establish an affordability assurance 
program and shall adopt rules to,implement that program. Rules adopted pursuant to this 
subsection are routine t~chnical rules as defined in Title 5, chap-ter 375, subchapter 2-A. 
The program must include, but is not limited to: 
A. Rates of compensation for participating providers in organized delivery systems 
and in the open plan; 
B. Operation of the Small Business Hardship Fund to assist employers for which the 
plan constitutes a hardship; 
C. Maintenance of a prescription drug formulary; and 
D. Cost containment mechanisms for organized delivery systems and for the open 
plan. Cost containment mechanisms may include primary care case management, 
guaranteed provider payment, variable reimbursement rates for providers, review of 
treatment and services concurrent with the provision of the treatment and services, 
expenditure targets, practice parameters and treatment norms. 
3. Efficiency of care. The agency shall establish an efficiency-of-care program and 
shall adopt rules to implement that program. Rules adopted pursuant to this subsection 
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are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. The agency 
shall review health care malpractice insurance costs and shall work with organized 
delivery systems, participating providers and insurers to ensure that the resources of the 
fund are used for maximum service delivery. The agency shall develop claims handling 
and data collection methods and forms, including, but not limited to, uniform billing 
forms and procedures to facilitate the exchange of information and communication 
between the agency and participating providers. 
4. Health plan nine. The agency shall establish a health planning program and adopt 
rules to implement that program. Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. Health planning must 
be considered in light of the programs on quality, affordability and efficiency established 
under subsections 1 to 3. The program must include, but is not limited to: 
A. Global budgets for all expenditures of the plan for the base year of the plan and 
for each following year based on the level of expenditures in the preceding year as 
increased by the percentage of increase in the average per capita personal income 
applicable to the State, as developed by the United States Department of Commerce; 
B. Global budgets for hospitals and institutional providers with adjustments for case 
mix, volume and region and separate capital budgets for hospitals and institutional 
providers; 
C. A certificate of need program, pursuant to chapter 103-A; 
D. A health planning program; and 
E. Data collection regarding health care needs, resources and expenditures. 
SUBCHAPTER 4 
FINANCING OF THE MAINE HEALTH CARE PLAN 
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§374. Financing of Maine Health Care Plan 
Financing of the plan is accomplished by the fund. 
1. 
Maine Health Care Trust Fund. 
The Maine Health Care Trust Fund is 
established to finance the plan. Deposits into the fund and expenditures from the fund 
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must be made pursuant to this section and to rules adopted by the agency to carry out the 
purposes of this section. All income generated pursuant to this chapter must be deposited 
in the fund, which does not lapse but carries forward from one fiscal year to the next. 
Rules adopted pursuant to this section are routine technical rules as defined in Title 5, 
chapter 375, subchapter 2-A. 
A. The Small Business Hardship Fund is established as a part of the fund to assist 
self-employed persons and employers for which participation in the plan constitutes a 
hardship. 
B. Payments are deposited into the fund from the following sources: 
(1) Premium payments made by individuals and employers as follows: 
(a) Premium levels for individuals must be based on 2 levels of income: 
income at or under $35,000 per year and income over $35,000 per year; and 
(b) 
Assessment levels for employers must be based on 2 levels of 
profitability: that measured by a profit margin smaller than 10% and that 
measured by a profit margin of 10% or greater; 
(2) Premium payments made by residents and nonresidents based on earned 
income not included in subparagraph (I) and on unearned income; 
(3) Payments made by federal, state and local governmental units; 
(4) Payments from the increase in the cigarette tax from 100 miJIs to 102.5 mills 
levied pursuant to Title 36, section 4365, beginning in fiscal year 2008-09. 
Payments from the cigarette tax must be deposited into the Small Business 
Hardship Fund. Only amounts not required for that fund may be transferred from 
that fund into the Maine Health Care Trust Fund; 
(5) Copayments for permanent care made pursuant to section 372, subsection 3, 
paragraph D; and 
(6) Other payments made pursuant to law. 
C. Expenditures from the fund are authorized for the following purposes: 
(I) One percent of the budget of the fund for health promotion and injury, 
disease and disability prevention programs; 
(2) 
Payments to participating providers for health care servIces rendered 
pursuant to section 372, subsection 4; 
(3) Payments to nonparticipating providers for health care services rendered 
pursuant to section 372, subsection 4; 
(4) Payments for capital expenditures approved pursuant to chapter 103-A; 
(5) Payments to the Small Business Hardship Fund; 
(6) Payments for administration of the fund and the plan; 
(7) Payments for the operations and expenditures of the agency, the council and 
any advisory committees authorized by law or appointed by the agency; and 
(8) Other payments made pursuant to law. 
2. 
Requirements for expenditures. 
The agency shall adopt rules setting the 
requirements for expenditures from the fund. Rules adopted pursuant to this subsection 
are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A. The agency 
shall perform quarterly reviews of expenditures within the open plan and organized 
delivery systems to determine whether expenditures are within the budget of the agency. 
The requirements must include: 
A. For organized delivery systems, rates that are based on capitation, that utilize risk 
adjustment and that are set to reflect whether a region is underserved or has low 
income and utilization rates; 
B. For participating providers in the open plan, rates that are set to reflect costs, 
volume and relative value of services and that may be based on contracts and 
capitation; 
C. For institutional providers and hospitals, rates that are based on global budgets; 
and 
D. For rural health centers and the family planning system, rates that reflect their 
special mission and needs. 
SUBCHAPTER 5 
MAINE HEALTH CARE AGENCY 
§375. Establishment 
The Maine Health Care Agency is established as an independent executive agency to: 
1. Maine Health Care Plan. Administer and oversee the Maine Health Care Plan 
established by section 372; 
2. Maine Health Care Council. Take action under the direction of the Maine 
Health Care Council established by section 377; and 
3. Maine Health Care Trust Fund. Administer and oversee the Maine Health Care 
Trust Fund established by section 374, subsection 1. 
§376. General powers 
In addition to the powers granted to the agency elsewhere in this chapter, the agency 
is authorized to act as necessary to carry out the purposes of this chapter, including, but 
not limited to, the following. 
1. Rulemaking. The agency may adopt, amend and repeal rules as necessary for the 
proper administration and enforcement of this chapter, subject to the Maine 
Administrative Procedure Act. Rules adopted pursuant to this subsection are routine 
technical rules as defined in Title 5, chapter 375, subchapter 2-A. 
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2. Executive director and staff. The agency shall employ an executive director, 
who must have had experience in the organization, financing or delivery of health care 
and who shall perform the duties delegated by the agency. The agency may delegate to 
the executive director any of its functions and duties except the adoption of rules, the 
establishment of a global budget for health care for the State under section 373, 
subsection 4 and the approval of certification of need applications under chapter 103-A. 
The executive director is an unclassified employee and serves at the pleasure of the 
council. The executive director, at the direction of the agency, shall hire personnel to 
administer this chapter, subject to the Civil Service Law and within the budget set by the 
agency. 
3. Receipt of gifts, grants and payments; fees. The agency may solicit, receive and 
accept gifts, grants, payments and other funds and advances from any person and enter 
into agreements with respect to those grants, gifts, payments and other funds and 
advances, including agreements that involve the undertaking of studies, plans, 
demonstrations and projects. The agency may charge and retain fees to recover the 
reasonable costs incurred in reproducing and distributing reports, studies and other 
publications and in responding to requests for information. 
4. Studies and analyses. The agency may conduct studies and analyses related to 
the provision of health care, health care costs and matters it considers appropriate. 
5. Grants. The agency may make grants to persons to support research or other 
activities undertaken in furtherance of the purposes of this chapter. Without the specific 
written authorization of the agency, a party receiving a grant from the agency may not 
release, publish or otherwise use results of the research or information made available by 
the agency. 
6. Contracts. The agency may contract with anyone for services necessary to carry 
out the activities of the agency. Without the specific written authorization of the agency, 
a party entering into a contract with the agency may not release, publish or otherwise use 
information made available to that party under contracted responsibilities. 
7. 
Audits. To the extent necessary to carry out its responsibilities, the agency, 
during normal business hours and upon reasonable notification, may audit, examine and 
inspect any records of any health care provider, organized delivery system or contractor. 
8. Data collection. The agency shall institute a data collection system to acquire and 
analyze information on the provision of health care and health care costs. 
All data 
released by the agency must protect the confidentiality of the health care provider and the 
client and, whenever possible, must be released as aggregate data. 
9. 
Complaint resolution. 
In cooperation with health care providers and plan 
members, the agency shall institute a complaint resolution system to handle the 
complaints of health care providers and plan members. 
10. Funding. The agency shall determine the level of funding required to carry out 
the purposes of this chapter. The agency shall submit biennially to the Legislature for 
approval a proposed budget with levels of premiums and assessments and taxes under 
Page \0 - 123LR0603(OI)-1 
Title 36, section 4365. Funding for the agency budget approved by the Legislature is 
paid from the fund. 
11. Coordination with federal, state and local health care systems. The agency 
shall institute a system to coordinate the activities of the agency and the plan with the 
health care programs of the federal, state and municipal governments. 
12. Reports. On or before January 1 st of each year, the agency shall submit to the 
Governor and the Legislature a report of its operations and activities during the previous 
year, including its operations and activity with respect to the funding, tax and budget 
requirements pursuant to subsection 10. This report must include facts and suggestions 
and policy recommendations that the agency considers necessary. 
As it determines 
appropriate, the agency shall publish and disseminate information helpful to the citizens 
of this State in making informed choices in obtaining health care, including the results of 
studies or analyses undertaken by the agency. 
13. Advisory committees. The agency may appoint advisory committees to advise 
and assist the agency. Members of those committees serve without compensation but 
may be reimbursed by the agency for necessary expenses while on official business of the 
committee. 
14. Headquarters. The agency's central office must be in the Augusta area, but the 
agency may hold hearings and sessions at any place in the State. 
15. Seal. The agency may have a seal bearing the words "Maine Health Care 
Agency." 
§377. Maine Health Care Council 
The Maine Health Care Council is established as the decision-making and directing 
council for the agency. 
1. Membership. The council is composed of 3 members, appointed by the Governor 
and, within 30 days after authorization, subject to review by the joint standing committee 
of the Legislature having jurisdiction over insurance and financial services matters and 
the joint standing committee of the Legislature having jurisdiction over health and human 
services matters and to confirmation by the Legislature. 
Persons eligible for appointment to the council must have had experience in the 
organization, delivery or financing of health care. At least one member of the council 
must be an individual with experience in the delivery and organization of primary and 
preventive care and public health services. At least one member of the council must be 
an individual who is not a health care provider and has not worked for a health care 
provider or health insurer. Members ofthe council shall devote full time to their duties. 
2. Terms. Members serve 5-year terms, except that a member appointed to fill a 
vacancy in an unexpired term serves only for the remainder of that term. Members hold 
office until the appointment and confirmation of their successors. 
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3. Chair; votin&:. The Governor shall designate one member of the council as chair. 
The chair shall preside at meetings of the council, is responsiQ.l~_.fQL thL~~R.~di~!lt 
organization of the agency's work and may vote on all matters before the council. Two 
council members constitute a quorum. 
The council may take action only by an 
affirmative vote of at least 2 members. 
4. 
Duties. 
The council shall direct, administer and oversee the agency in the 
performance of its duties under this chapter. The council shall annually prepare a state 
health plan in accordance with Title 2, chapter 5. The council has broad authority to 
carry out the purposes of this chapter. 
Sec. A-2. 
Working capital advance. 
The State Controller shall transfer a 
$400,000 working capital advance to the dedicated account of the Maine Health Care 
Trust Fund on the effective date of this Part. The Maine Health Care Agency shall repay 
this working capital advance by June 30, 2009. 
Sec. A-3. Staggered terms. Notwithstanding the Maine Revised Statutes, Title 
22, section 377, subsection 2, for the initial members of the Maine Health Care Council, 
the Governor shall appoint one member for a one-year term, one member for a 2-year 
term and one member for a 3-year term. 
Sec. A-4. Effective date. This Part takes effect January I, 2008. 
PART 8 
Sec. 8-1. Maine Health Care Plan Transition Advisory Committee. 
1. Establishment. The Maine Health Care Plan Transition Advisory Committee is 
established to advise the members of the Maine Health Care Council as established in the 
Maine Revised Statutes, Title 22, section 377. 
2. Membership. The committee consists of 20 members, who are appointed as 
specified in this subsection and are subject to confirmation by the Legislature. 
Four members must be Legislators. Two of those members must be appointed by the 
President of the Senate, one from each of the 2 political parties having the largest number 
of members in the Senate, and 2 must be appointed by the Speaker of the House of 
Representatives, one from each of the 2 political parties having the largest number of 
members in the House. 
Sixteen representatives of the public must be appointed as follows: 8 members by the 
Governor, 4 members by the President of the Senate and 4 members by the Speaker of the 
House of Representatives. 
The appointing authorities shall notify the Executive Director of the Legislative Council 
upon making their appointments. All appointments must be made within 30 days of the 
effective date of this Part. 
Within the following 30 days, the appointments must be 
reviewed and approved by a joint committee consisting of the members of the joint 
standing committee of the Legislature having jurisdiction over insurance and financial 
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services matters and the joint standing committee of the Legislature having jurisdiction 
over health and human services matters and must be confirmed by the Legislature. 
The public members must represent statewide organizations from the following groups: 
consumers, uninsured persons, providers of maternal and child health services, Medicaid 
recipients, persons with disabilities, persons who are elderly, organized labor, allopathic 
and osteopathic physicians, nurses and allied health care professionals, organized delivery 
systems, hospitals, community health centers, the family planning system and the 
business community, including a representative of small business. 
When appointment of all members of the committee is completed, the chair of the 
Legislative Council shall call the committee together for its first meeting. The first 
meeting must be held within 90 days of the effective date of this Part. The members of 
the committee shall elect a chair from among the members. 
3. 
Responsibilities. 
The committee shall hold public hearings, solicit public 
comments and advise the Maine Health Care Council for the purposes of planning the 
transition to the Maine Health Care Plan and recommending legislative changes to 
accomplish the purposes of the Maine Revised Statutes, Title 22, chapter 106. 
4. Staffing and funding. The Maine Health Care Council shall provide staffing and 
funding for the committee. 
5. Compensation. Members of the committee serve without compensation. They 
are entitled to reimbursement from the Maine Health Care Council for travel and other 
necessary expenses incurred in the performance of their duties on the committee. 
6. Reports. As it determines appropriate, the committee shall report to the Maine 
Health Care Council. The committee shall report to the Governor and to the Legislature 
on July 1,2008, January 1,2009, July 1,2009 and December 31,2009. 
7. Completion of duties. The committee shall complete its duties on December 31, 
2009, when all terms of membership on the committee expire. 
Sec. 8-2. Effective date. This Part takes effect January 1, 2008. 
PART C 
Sec. C-l. 2 MRSA §6-F is enacted to read: 
§6-F. Salaries of members of Maine Health Care Council and executive director of 
Maine Health Care Agency 
Notwithstanding any other provision of law, the salaries of members of the Maine 
Health Care Council, as established in Title 22, section 377, and of certain employees of 
the Maine Health Care Agency, as established in Title 22, section 375, are as follm.\i: 
1. Members, Maine Health Care Council. The salaries of the members of the 
Maine Health Care Council, as established in Title 22, section 377, are within salary 
range 91. 
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2. Executive director, Maine Health Care Agency. The salary of the executive 
director of the Maine Health Care Agency, as established in Title 22, section 375, IS 
within salary range 91. 
Sec. C-2. Effective date. This Part takes effect January 1, 2008. 
PARTD 
Sec. D-l. 24-A MRSA §2185-A is enacted to read: 
§2185-A. Benefits that duplicate health care benefits of Maine Health Care Plan 
Health insurance policies and contracts and health care contracts and plans are 
subject to the following provisions. 
1. 
Prohibited conduct. 
A person, insurer, health maintenance organization or 
nonprofit hospital or medical service organization may not sell or offer for sale in this 
State a health insurance policy or contract or a health care contract or plan that offers 
benefits that duplicate the health care benefits offered by the Maine Health Care Plan 
under Title 22, section 372, subsection 3 unless that person, insurer, health maintenance 
organization or nonprofit hospital or medical service organization has been authorized as 
an organized delivery system by the Maine Health Care Agency pursuant to Title 22, 
section 372, subsection 4, paragraph A. A violation of this section constitutes an unfair 
and deceptive trade practice under section 2152. 
2. 
Allowed conduct. 
A person. insurer, health maintenance organization or 
nonprofit hospital or medical service organization may sell or offer for sale in the State a 
health insurance policy or contract or a health care contract or plan that offers coverage 
and benefits that are supplemental to and do not duplicate covered health care benefits 
offered by the Maine Health Care Plan under Title 22, section 372, subsection 3. 
Sec. D-2. Effective date. This Part takes effect July 1, 2008 and applies to all 
policies, contracts and plans delivered or issued for delivery on or after July 1, 2008. For 
purposes of this section, all contracts are deemed to be renewed no later than the next 
yearly anniversary of the contract date. 
PARTE 
Sec. E-l. 36 MRSA §4365, as amended by PL 2005, c. 457, Pt. AA, § I 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 +00 102.5 mills for each cigarette. Payment of the tax is 
evidenced by the affixing of stamps to the packages containing the cigarettes. 
Sec. E-2. 36 MRSA §4365-F, as enacted by PL 2005, c. 457, Pt. AA, §3 and 
affected by §8, is repealed. 
Sec. E-3. 36 MRSA §4365-G is enacted to read: 
§4365-G. Application of cigarette tax rate increase effective December 1, 2007 
The following provisions apply to cigarettes held for resale on December I, 2007. 
1. Stamped rate. Cigarettes stamped at the rate of 100 mills per cigarette and held 
for resale after December 1,2007 are subject to tax at the rate of 102.5 mills per cigarette. 
II 
2. Liability. A person possessing cigarettes for resale is liable for the difference 
between the tax rate of 102.5 mills per cigarette and the tax rate of 100 mills per cigarette 
in effect before December I, 2007. Stamps indicating payment of the tax imposed by this 
section must be affixed to all packages of cigarettes held for resale as of December 1, 
2007, except that cigarettes held in vending machines as of that date do not require that 
stamp. 
3. Vendin&: machines. Notwithstanding any other provision of this chapter, it is 
presumed that all cigarette vending machines are filled to capacity on December 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 102.5 mills per 
cigarette placed in vending machines before December 1, 2007. 
4. Payment. Payment of the tax imposed by this section must be made to the 
assessor by December 1, 2007, accompanied by forms prescribed by the assessor and 
credited to the Maine Health Care Trust Fund, as established by Title 22, section 374, 
subsection 1. 
PART F 
Sec. F-l. 
Employment retraining. 
The Maine Health Care Agency, as 
established in the Maine Revised Statutes, Title 22, section 375, shall coordinate with the 
Department of Economic and Community Development, the Department of Labor and 
private industry councils to ensure that employment retraining services are available for 
administrative workers employed by insurers and providers who are displaced due to the 
transition to the Maine Health Care Plan established in Title 22, section 372. 
Sec. F -2. Delivery of long-term health care services. The Maine Health Care 
Agency, as established in the Maine Revised Statutes, Title 22, section 375, shall study 
the delivery of long-term health care services to Maine Health Care Plan members under 
Title 22, chapter 106. The study must address the best and most efficient manner of 
delivery of health care services to 
individuals needing long-term care and funding 
sources for long-term care. In undertaking the study, the agency shall consult with the 
Maine Health Care Plan Transition Advisory Committee established in Part B of this Act, 
representatives of consumers and potential consumers of long-term care services, 
representatives of providers of long-term care services and representatives of employers, 
employees and the public. 
The agency shall submit its report to the joint standing 
committee of the Legislature having jurisdiction over health and human services matters 
on or before January 1, 2009 and may include suggested legislation in the report. 
) 
t 
) 
Following receipt and review of the report, the joint standing committee may submit 
legislation based on the report to the First Regular Session of the 124th Legislature. 
1 
IS 
Sec. F-3. Provision of health care services. The Maine Health Care Agency, as 
established in the Maine Revised Statutes, Title 22, section 375, shall study the provision 
of health care services under the MaineCare, Medicaid and Medicare programs. The 
study must consider the waivers necessary to coordinate the Medicaid and Medicare 
programs with the Maine Health Care Plan established in Title 22, chapter 372; the 
method of coordination of benefit delivery and compensation; reorganization of State 
Government necessary to achieve the objectives of the agency; and any other changes in 
law needed to carry out the purposes of Title 22, chapter 106. The agency shall apply for 
all waivers required to coordinate the benefits of the Maine Health Care Plan and the 
Medicaid and Medicare programs. 
The agency shall submit its report to the joint 
standing committee of the Legislature having jurisdiction over health and human services 
matters on or before March 1, 2008 and may include suggested legislation in the report. 
Following receipt and review of the report, the joint standing committee may submit 
legislation based on the report to the First Regular Session of the 124th Legislature. 
SUMMARY 
This bill establishes a universal access health care system that offers a choice of 
coverage through organized delivery systems or through a managed care system operated 
by the Maine Health Care Agency and channels all health care dollars through a 
dedicated trust fund. 
I. Part A of the bill does the following. 
It establishes the Maine Health Care Plan to provide security through high-quality, 
affordable health care for the people of the State. All residents and nonresidents who 
maintain significant contact with the State are eligible for covered health care services 
through the Maine Health Care Plan. The plan is funded by the Maine Health Care Trust 
Fund, a dedicated fund receiving payments from employers, individuals and plan 
members and, after fiscal year 2007, from the 5¢ per package increase in the cigarette tax. 
The Maine Health Care Plan provides a range of benefits, including hospital services, 
health care services from participating providers, laboratories and imaging procedures, 
home health services, rehabilitative services, prescription drugs and devices, mental 
health services, substance abuse treatment services, dental services, vision appliances, 
medical supplies and equipment and hospice care. Health care services under the Maine 
Health Care Plan are provided by participating providers in organized delivery systems 
and through the open plan, which is available to all providers. The plan is supplemental 
to other health care programs that may be available to plan members, such as Medicare, 
Medicaid, the federal Civilian Health and Medical Program of the Uniformed Services, 
the federal Indian Health Care Improvement Act and workers' compensation. 
It establishes the Maine Health Care Agency to administer and oversee the Maine 
Health Care Plan, to act under the direction of the Maine Health Care Council and to 
administer and oversee the Maine Health Care Trust Fund. 
The Maine Health Care 
Pa:.r~ 16 .. 123LRilliO:J(OIH 
Council is the decision-making and directing council for the agency and is composed of 3 
full-time appointees. 
It directs the Maine Health Care Agency t6 establish programs to ensure quality, 
affordability, efficiency of care and health planning. 
The agency health planning 
program includes the establishment of global budgets for health care expenditures for the 
State and for institutions and hospitals. The health planning program also encompasses 
the certificate of need responsibilities of the agency pursuant to the Maine Revised 
Statutes, Title 22, chapter 1 03-A and the health planning responsibilities pursuant to Title 
2, chapter 5. 
It contains a directive to the State Controller to advance $400,000 to the Maine 
Health Care Trust Fund on the effective date, January 1, 2008. This amount must be 
repaid by the Maine Health Care Agency by June 30,2009. 
2. 
Part B of the bill establishes the Maine Health Care Plan Transition Advisory 
Committee. 
Composed of 20 members, appointed and subject to confirmation, the 
committee is charged with holding public hearings, soliciting public comments and 
advising the Maine Health Care Agency on the transition from the current health care 
system to the Maine Health Care Plan. 
Members of the committee serve without 
compensation but may be reimbursed for their expenses. The committee is directed to 
report to the Governor and to the Legislature on July 1,2008, January 1,2009, July I, 
2009 and December 31, 2009. The committee completes its work on December 31, 2009. 
3. Part C of the bill establishes the salaries of the members of the Maine Health Care 
Council and the executive director of the Maine Health Care Agency. 
4. Part D of the bill prohibits the sale on the commercial market of health insurance 
policies and contracts that duplicate the coverage provided by the Maine Health Care 
Plan. It allows the sale of health care policies and contracts that do not duplicate and are 
supplemental to the coverage of the Maine Health Care Plan. 
5. Part E of the bill imposes a 5¢ per package increase in the cigarette tax beginning 
December 1, 2007. Proceeds from the cigarette tax increase are paid to the Maine Health 
Care Trust Fund. 
6. Part F of the bill directs the Maine Health Care Agency to ensure employment 
retraining for administrative workers employed by insurers and providers who are 
displaced by the transition to the Maine Health Care Plan. It directs the Maine Health 
Care Agency to study the delivery and financing of long-ternl care services to plan 
members. Consultation is required with the Maine Health Care Plan Transition Advisory 
Committee, representatives of consumers and potential consumers of long-term care 
services and representatives of providers of long-term care services, employers, 
employees and the public. A report by the agency to the joint standing committee of the 
Legislature having jurisdiction over health and human services matters is due January I, 
2009. 
The Maine Health Care Agency is directed to study the proVISion of health care 
services under the MaineCare, Medicaid and Medicare programs, waivers, coordination 
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of benefit delivery and compensation, reorganization of State Government necessary to 
accomplish the objectives of the Maine Health Care Agency and legislation needed to 
carry out the purposes of the bill. The agency is directed to apply for all waivers required 
to coordinate the benefits of the Maine Health Care Plan and the Medicaid and Medicare 
programs. 
A report by the agency is due to the joint standing committee of the 
Legislature having jurisdiction over health and human services matters by March 1,2008 . 
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