Tax doomed; Is Dirigo in trouble?

I’d call this a good day for the people of the State of Maine. A People’s Veto drive has been successful in gathering sufficient signatures to force a referendum in November on a tax increase. Campaign organizers had just a few weeks to gather more than 55-thousand signatures to force the citizens’ vote in November. Yesterday the organizers turned in petitions containing more than 90-thousand to the Secretary of State.

The group was alliance called Fed Up With Taxes and was a coalition of the Maine Chamber of Commerce, several beverage groups, the Maine Taxpayers United, and many small stores and restaurants around the state.

The group was put together following the passage of a tax on most beverages, except milk products, and a new tax on paid insurance claims. It was designed to raise more than 50-million dollars to fund the state’s failed Dirigo health plan. The Legislature passed the tax in the dead of night as the last Legislature was ending. Although proponents of the tax claimed public hearings on a similar measure two years ago was sufficient, the coalition and many Mainers felt there was no public hearing or public input into this increase.

It was scheduled to take effect 90 days after adjournment, but because of the petition drive to veto it the increase is on hold until after the elections.

Reading all the comments on the MaineToday.com website leads one to believe there is a growing feeling that Maine, already the highest taxed state in the nation, has had enough taxes. The vast majority of posters yesterday indicated also that the Dirigo health plan itself should also be dumped. It is, of course, the signature event of the Gov. Baldacci administration so I’d expect the governor and his supporters to simply find something else to try taxing to raise the money.

I’ve been calling the Dirigo health plan a failure for weeks. Some simple facts support that stand. When the governor first proposed Dirigo, the state’s initial entry into an eventual single payer health system similar to the one in Canada, we were promised that within five years Dirigo would have enrolled more than 35-thousand previously uninsured Mainers and that it would be self-sustaining. Now five years into the plan, there are fewer than 15-thousand enrollees (The number changes from 18-thousand to 13-thousand depending on who’s talking and the audience listening.) and half of them already had private insurance.

It is not self-sustaining. I don’t remember all the funding plans, but the one currently in use and the one that will continue because of the veto drive is one where the Dirigo board makes up a number it says it has save Maine in health costs and charges that amount to insurance companies. The name of the payment is SOP, Savings Offset Plan. It has never, at least that I have ever read, explained just what those savings are. The charge does not fully fund for Dirigo.

Then in that midnight decision last session, the Legislature came up with the tax on nearly all beverages except milk products and a tax on paid insurance claims to raise somewhere between 50-million dollars and $75-million, depending on whom you’re listening to. Those are taxes that will hit every single man, woman, and child in Maine one way or another. And it was all to fund the failed program to insure 15-thousand people. It may have been less expensive to simply buy private insurance.

And another signal of failure is that Dirigo is not currently accepting new enrollees and the board was counting on the tax to at least open it up to some small businesses.

The very best solution is one the governor probably doesn’t have the courage to take. Simply admit it didn’t work, suspend Dirigo long enough for the enrollees to find new insurance, then deep six it altogether. That could be a positive legacy the governor so dearly craves.

We do need insurance reform in Maine. The one policy fits all fits practically no one. Under current rules, we 70+ year old men have to have pregnancy insurance. My wife tells me she can no longer get me pregnant. And there are numerous other requirements that make no sense. If people could buy the insurance they needed and wanted, as they can in most other states, our costs would drop dramatically. A simple comparison of insurance rates with those in neighboring New Hampshire would be an incredible eye opening experience.

But reform will have to be the topic of another discussion. For today, Mainers have a chance to decide for themselves if they want to fund Dirigo through beverages in November. I’ll be voting for repeal, and if the comments on the newspaper website are any indication, so will many other Mainers.

GiM