Court Opinion

ID: 9753531
Source: CourtListenerOpinion
Date Created: 2023-08-28 19:17:20.926774+00
Date Added: 2024-06-11T10:01:47.343200
License: Public Domain

ALEXANDER, J.,
dissenting.
[¶ 61] The Court’s opinion thoroughly and accurately addresses the law and the legislative history that governs our review of the subsidy for the Dirigo Health program, and calculation of the “aggregate measurable cost savings” described in 24-A M.R.S. § 6913(1)(A) (2006).
[¶ 62] I concur in those aspects of the opinion that recognize that (1) the executive proponents and legislative drafters of Dirigo Health intended that the “cost savings” to be charged to health insurers and their consumers as “offset payments” would be those bad debt and charity care costs avoided as previously uninsured individuals became insured by Dirigo Health; (2) after Dirigo Health was enacted, concern was expressed that cost savings from bad debt and charity care costs avoided would not support the subsidy the program would require; (3) these concerns did not result in change to the operative provisions of the original legislation; (4) “aggregate measurable cost savings” is an undefined and ambiguous term for which “we find no substantive guidance through precedent,” Court’s Opinion ¶ 2; (5) the Legislature delegated to the Board of Directors of Dirigo Health and the Superintendent of Insurance the authority to interpret this ambiguous term; and (6) the result of this delegation was an offset payment assessment nearly twenty times higher than that originally contemplated by the executive proponents and legislative drafters of Dirigo Health.
[¶ 63] I differ with the Court’s opinion only in its ultimate conclusion that the ambiguity in the law must be resolved by delegating and deferring to the administrative agency, giving the agency license to assess offset payments according to whatever definition of “cost savings” the agency deems appropriate to meet its financial needs. From that conclusion, I respectfully dissent.
[¶ 64] The funding scheme to subsidize Dirigo Health authorizes its self-interested Board of Directors to decide how much money they want to spend, call that amount “cost savings,” and then require payment of that sum as “savings offsets” by other health insurers and their consumers. The “cost savings” identified by the Dirigo Board included increased State payments to hospitals for past due MaineCare bills, increased MaineCare payment rates for physicians, and economic projections that hospitals might voluntarily reduce cost increases. Calling payments of past due bills and increased MaineCare payment rates “savings” gives new meaning to the term. Common sense dictates that when you spend money, you do not save money.
[¶ 65] For the first assessment year, the Dirigo Board decided that health insurers and their consumers should be charged $136.8 million in such savings offsets to subsidize Dirigo Health. This was a subsidy of more than $10,000 per person, per year for each of the approximately 13,000 persons who became insured by Dirigo Health. The Superintendent of Insurance pared this savings offset back to $43.7 *936million, or about a $3000 per year subsidy for each person covered by Dirigo Health.
[¶ 66] Review of the Superintendent’s decision indicates significant difficulty in rationally distinguishing between those “cost savings” that the Superintendent excluded and those that he allowed to reduce the Dirigo Health subsidy from $136.8 million to $43.7 million. This difficulty in distinguishing between included and excluded cost savings derives from the ambiguous and undefined terminology in section 6913(1)(A).
[¶ 67] The “cost savings” sought by the Dirigo Board and allowed by the Superintendent included $2.7 million in bad debt and charity care avoided by the operation of Dirigo Health. No one disputes that this sum may be assessed as a savings offset. As the Court’s opinion ably points out, this is the real dollar savings that the program’s proponents originally argued would result to justify the savings offset subsidy from health insurers and their consumers to support Dirigo Health.
[¶ 68] The remaining $41 million in “cost savings” approved by the Superintendent are not the real dollar savings predicted by the program proponents, but fanciful characterizations of spending as “savings,” and hoped for reductions in the rate of hospital cost increases, characterized as “savings” based on the ambiguous “aggregate measurable cost savings” term in the statute. While that $41 million is based on no identified real dollar savings caused by Dirigo Health, it results in real dollar charges to health insurers and their consumers. With commendable candor, the proponents of Dirigo Health conceded at oral argument that the program is raising the cost of health insurance for most Mainers covered by health insurance.
[¶ 69] The fact that the Dirigo Health Board of Directors and the Superintendent of Insurance could arrive at such dramatically different figures for “aggregate measurable cost savings” demonstrates the significant ambiguity of the term and the highly subjective, judgmental analysis it invites the Board and the Superintendent to use in determining the savings offset charge. The Court’s opinion thoroughly discusses the problems this ambiguity creates and the administrative attempts to resolve it. However, the recognized ambiguity in the statute and its reliance on subjective and judgmental decision making cannot be resolved by delegation and deference to the agencies charged with administration of the law, here, the Dirigo Health Board of Directors and the Superintendent of Insurance.
[¶ 70] We have regularly said that, in resolution of ambiguities in statutes, we defer to the agency charged with administration of the law, and that as long as the interpretation the agency adopts is a reasonable one, the actions the agency takes in accordance with that reasonable interpretation will be affirmed. See S.D. Warren Co. v. Bd. of Envtl. Prot., 2005 ME 27, ¶¶ 4-5, 868 A.2d 210, 213-14, aff'd — U.S. —, 126 S.Ct. 1843, 164 L.Ed.2d 625 (2006). However, that deference has its limits.
[¶ 71] When terminology in a statute is so vague and ambiguous that those regulated must guess at its meaning, and an agency is given license to act based on preferences or criteria so subjective that they are virtually unreviewable, we have held that such subjective license is an improper delegation of legislative authority to the executive. See Kosalka v. Town of Georgetown, 2000 ME 106, ¶ 17, 752 A.2d 183, 187 (holding that a regulatory standard that is “an unmeasurable quality, totally lacking in cognizable, quantitative standards” renders that standard “an unconstitutional delegation of legislative authority and violative of the due process clause”); see also City of Portland v. Ja*937cobsky, 496 A.2d 646, 649 (Me.1985) (holding a regulatory requirement improperly vague when it was stated “in terms so vague that people of common intelligence must guess at its meaning”); Me. Real Estate Comm’n v. Kelby, 360 A.2d 528, 531 (Me.1976) (holding that a statute is void for vagueness when it forces people “of general intelligence to guess at its meaning, leaving them without assurance that their behavior complies with legal requirements and forc[es] courts to be uncertain in their interpretation of the law” (quotation marks omitted)).
[¶ 72] The unfathomable ambiguity of the “cost savings” provision in section 6913(1)(A) is rather dramatically demonstrated here when the original proponents’ interpretation of the “cost savings” provision would generate a $2.7 million savings offset charge, the Dirigo Board, charged with administration of the law, interpreted the same provision to justify a $136.8 million savings offset charge, and the Superintendent of Insurance, reviewing the Board’s determination interpreted the same provision to support a $43.7 million savings offset charge. Reasonable people do differ, and differ geometrically, in guessing at the meaning of the “cost savings” provision. And the statute provides no guidance as to how these differences may be resolved.
[¶ 73] Article III of the Maine Constitution imposes a strict separation of powers, reserving specific authority to the Executive Branch, to the Legislature, and to the Judiciary. See Bossie v. State, 488 A.2d 477, 480-81 (Me.1985). Our constitution reserves to the Legislature the authority to raise revenues and decide what funds can be spent to promote the public good. ME. CONST, art. I, § 22; see Boston Milk Producers Inc. v. Halperin, 446 A.2d 33, 40-41 (Me.1982) (holding that the Legislature “unconstitutionally surrendered its power of taxation” when it delegated to one group of citizens the power to increase another group’s taxes); see also Morris v. Goss, 147 Me. 89, 107-08, 83 A.2d 556, 566 (1951) (holding that, absent constitutional authorization, the power to tax rests exclusively with the Legislature). That authority cannot be delegated to the Executive Branch without very specific guidance, requiring that any assessment to be made by the Executive Branch, rather than the Legislature, is within an identifiable range necessary to achieve a defined public purpose, such as regulation "or promotion of a particular activity or profession — an area of frequent legislative delegation of fee setting authority. See Bd. of Overseers of the Bar v. Lee, 422 A.2d 998, 1004 (Me.1980), appeal dismissed, 450 U.S. 1036, 101 S.Ct. 1751, 68 L.Ed.2d 233 (1981); see generally State v. Lasky, 156 Me. 419, 165 A.2d 579 (1960) (finding constitutional tax statute meant to raise funds for the benefit of the shellfish industry).
[¶ 74] No legislative guidance for assessing and spending is provided by the undefined “cost savings” term in the Dirigo Health legislation. That lack of guidance cannot be resolved by a deferential standard of judicial review of agency action that gives license to the agency to treat spending as if it were savings in order to assess and spend as it wishes. I would hold that an improper delegation of legislative authority occurred here, giving license to the Board of Directors of Dirigo Health to identify as “aggregate measurable cost savings” not only identifiable real dollar savings, but also projected or even imagined savings based on economic estimates and unquantifiable predictions of the future economics of health care in areas that have nothing to do with Dirigo Health or state-subsidized insurance generally.
[¶ 75] The Legislature may, out of necessity, implement its taxing and spending authority based on economic estimates and predictions of future revenues. However, *938it cannot delegate to the Executive Branch the authority to raise revenues and impose costs, unlimited by any objective standards by which the Executive Branch’s observance of its delegated authority from the Legislature may be judged. Before the Board of Directors of Dirigo Health and the Superintendent of Insurance can be permitted to impose savings offset payment requirements upon health insurers that have the effect of raising the cost of health insurance to consumers, more specific criteria must be enacted to guide the identification of cost savings and permit review of agency action based on something more than the agency’s exercise of subjective judgment reliant on economic projections and predictions. Accordingly, I would vacate the judgment of the Superi- or Court affirming the decision of the Superintendent of Insurance.