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And the Magic Figure Is...
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Thursday, July 31, 2008
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The Dirigo Health board of directors, in its infinite wisdom, has determined that $146 million in health care costs have been saved this year because of Dirigo-related initiatives. Perhaps Mainers should be grateful that the board didn’t go along with the $190 million figure that was claimed by the agency earlier this summer. But the $146 million is nearly double the $78 million in savings the board identified last year.
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Dirigo Health regularly trots out a cadre of health care consultants to help bolster its savings claims, but the figure is based largely on assumptions ....
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The amount is important because it determines the so-called savings offset payment — a cost that, while assessed insurance companies, ultimately falls on individual policyholders, and businesses and nonprofts that insure their employees. The money goes to support the state’s DirigoChoice health insurance plan. The $146 million figure happens to be high enough to trigger the maximum savings offset payment, which is 4 percent of paid claims or approximately $80 million.
The Dirigo Health board contends that the number is much larger than last year’s because of new and improved methodology used in determining the alleged savings. But cynics might note that it comes at the same time some 90,000 Mainers have signed petitions setting in motion a peoples’ veto process that could repeal controversial new taxes on beer, wine, soda and health insurance enacted as an alternative to the savings offset tax on paid claims for individuals and covered employees.
Dirigo Health regularly trots out a cadre of health care consultants to help bolster its savings claims, but the figure is based largely on assumptions concerning what might or might not have occurred in the absence of Dirigo-related initiatives. Last year’s acting insurance superintendent was skeptical of the board’s $78 million figure, reducing the amount by more than half and allowing a savings offset payment of $32.8 million. But with a new insurance superintendent — appointed by a governor who has made Dirigo Health a cornerstone of his administration — all bets are off.
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