Opinion ID: 2320997
Heading Depth: 2
Heading Rank: 2

Heading: Legislation Aimed at Increasing Access to Health Insurance

Text: [¶ 7] We turn then to the statute at issue. In late 2002, the Governor proposed legislation intended to provide increased access to affordable health insurance in Maine. The Legislature passed an amended version of the Governor's proposal in 2003 as An Act To Provide Affordable Health Insurance to Small Businesses and Individuals and To Control Health Care Costs. P.L.2003, ch. 469. In addition to creating the Dirigo Health program, the Act initiated other changes in health care delivery in Maine. [¶ 8] The Act set forth a number of methods by which health care costs in Maine could be reduced. Among other things, the Act created the capital investment fund to limit the resources allocated annually pursuant to the certificate of need program, P.L.2003, ch. 469, § B-1 (codified at 2 M.R.S. § 102 (2006)); mandated that a certificate of need may be granted only if the project can be funded with the capital investment fund, P.L.2003, ch. 469, § C-8 (codified at 22 M.R.S. § 335(1)(E) (2006)); created the Advisory Council on Health Systems Development to gather and analyze data on health systems development in Maine and required the Governor to adopt a State Health Plan with input from this Council and other agencies and organizations, P.L.2003, ch. 469, § B-1 (codified as subsequently amended at 2 M.R.S. §§ 101-105 (2006)); suggested that each health insurance carrier voluntarily limit the pricing of products to no more than 3% underwriting gain, less federal taxes, for the 2003-2004 fiscal year, P.L. 2003, ch. 469, § F-1(1)(C); requested that hospitals voluntarily restrain cost increases, measured in expenses per case mix adjusted discharge, [3] to 3.5% or less and hold hospital consolidated operating margins [4] to no more than 3% during the 2003-2004 fiscal year, P.L.2003, ch. 469, § F-1(1)(B); and established the Commission to Study Maine's Community Hospitals, P.L.2003, ch. 469, § F-3, which ultimately recommended that the Legislature budget and pay past obligations to hospitals promptly and revise future periodic interim payment estimates to include a realistic forecast of the increased use of MaineCare, and that the State increase MaineCare payments to physicians and hospitals to cover their costs, see Commission to Study Maine's Hospitals, Report to the Legislature 5 (Feb.2005). [¶ 9] In the context of this broader Act, the Legislature also created the Dirigo Health program, the funding of which is at issue in this appeal. See P.L.2003, ch. 469, § A-8 (codified as chapter 87 of title 24-A). Dirigo Health was created as an independent executive agency that arrange[s] for the provision of comprehensive, affordable health care coverage to eligible small employers, including the self-employed, their employees and dependents, and individuals on a voluntary basis. 24-A M.R.S. § 6902 (2006); P.L. 2003, ch. 469, § A-8. [¶ 10] The operation of Dirigo Health is supervised by the Board of Directors, which consists of five voting members appointed by the Governor, subject to review by the joint standing committee of the Legislature with jurisdiction over health insurance matters and confirmation by the Senate, and three ex officio nonvoting members (the Commissioner of Professional and Financial Regulation or his or her designee, the director of the Governor's Office of Health Policy and Finance or the director of a successor agency, and the Commissioner of Administrative and Financial Services or his or her designee). 24-A M.R.S. § 6904(1) (2006). [¶ 11] The voting members of this Board must have knowledge and experience in one or more of six enumerated finance-or health-related areas. 24-A M.R.S. § 6904(2)(A) (2006). In addition, voting members may not be representatives or employees of insurance carriers or health care providers doing business or operating in Maine, or affiliates of a health or health-related organization regulated by Maine. 24-A M.R.S. § 6904(2)(B) (2006). [¶ 12] Dirigo Health is authorized by statute to establish sliding-scale subsidies for the purchase of Dirigo Health Program coverage paid by eligible individuals or employees whose income is under 300% of the federal poverty level, and for the purchase of employer-sponsored health coverage paid by employees of businesses with more than 50 employees, whose income is under 300% of the federal poverty level. 24-A M.R.S. § 6912 (2006). [¶ 13] At its core, the Dirigo Health program is intended to provide insurance to small businesses that could not otherwise afford to obtain health insurance for their employees. To make that possible, the Dirigo Health program subsidizes that insurance. Because Dirigo Health does not, after the first year, have its own comprehensive private or public funding to accomplish that goal, the funds for providing the subsidy must be found from other sources. Funding was anticipated to be obtained from three primary sources: first, employer and individual contributions, see 24-A M.R.S. § 6910(4) (2006); second, available federal funds, see 24-A M.R.S. §§ 6908(1)(I), (9), 6914 (2006); Comm. Amend. A to L.D. 1611, No. H-565, Fiscal Note (121st Legis.2003); and third, recoupment of savings anticipated to be experienced by insurers and third-party administrators following the implementation of the Act, see 24-A M.R.S. § 6913 (2006). [¶ 14] It is the nature of this latter source of fundingthe recoupment of savingsthat brings the parties before us. Pursuant to statute, health insurance carriers, 3rd-party administrators and employee benefit excess insurance carriers are responsible for making a savings offset payment to Dirigo on an annual basis. 24-A M.R.S. § 6913(3) (2006). To calculate the savings offset payment each year, the Legislature directed the Board of Directors of Dirigo Health to determine the aggregate measurable cost savings. 24-A M.R.S. § 6913(1)(A); see also P.L.2003, ch. 469, § A-8 (providing the original aggregate measurable cost savings language of section 6913(1)). [¶ 15] No comprehensive definition of aggregate measurable cost savings was contained in the original Act, which the 121st Legislature enacted during its first regular session, to take effect on September 13, 2003. P.L.2003, ch. 469. In the first special session of the 122nd Legislature, recognizing a need for greater clarity and guidance, the Legislature passed An Act To Modify Savings Offset Payments and To Clarify Certain Other Provisions of the Dirigo Health Act. P.L.2005, ch. 400 (effective Sept. 17, 2005); see L.D. 1577 (122nd Legis.2005); Comm. Amend. A to L.D. 1577, No. S-359 (122nd Legis.2005). Although this 2005 Act modified the process for calculating the savings offset payment, the new process continued to depend on the Board's determination of the aggregate measurable cost savings. P.L. 2005, ch. 400, §§ A-10, A-11 (codified at 24-A M.R.S. § 6913(1)-(3)). To assist the Board in making this determination, the Act created a working group that would, among other things, propose to the Board of Directors a methodology for calculating the aggregate measurable cost savings by September 20, 2005. P.L.2005, ch. 400, § B-1(3)(D). To provide a balanced review of the issues, the working group was required to include 5 members representing the interests of insurers, self-insured entities and 3rd-party administrators and 5 members representing the interests of Dirigo Health. P.L.2005, ch. 400, § B-1(1). The working group was not created to provide ongoing assistance to the Board; rather, it was directed to complete its duties by December 31, 2005. P.L. 2005, ch. 400, § B-1(6). [¶ 16] The 2005 Act and the statute it amended required the Board, after reviewing the working group's report, to hold a hearing, and determine and apply the proper methodology to calculate the aggregate measurable cost savings. 24-A M.R.S. § 6913(1)(A); P.L.2005, ch. 400, §§ A-10, B-1. The statute then required the Superintendent of Insurance to hold a public hearing to determine whether the savings calculated by the Board were reasonably supported by record evidence. 24-A M.R.S. § 6913(1)(C). [5]