Friday, May 9, 2008

The Cost of Dirigo Health Plan


The 123rd Legislature of Maine during their most recent session passed a bill LD2247 titled “An Act to Continue Maine’s leadership in Covering the Uninsured”.

Now putting aside for the moment, the pompous title of this legislation, and the implication that Maine is somehow a leader in the fight to solve the problem of Insurance in America, which I say is a far stretch, I thought I should bring to light a few points that I find to be of great import on this.

Let me begin by looking at what the Bill means to you and I.

Quite simply LD2247 means MORE TAXES for the Citizens of this State. There is no way to get around that fact or spin it into anything else. The legislature is asking for;

$ 5 Million a year from the Fund for a Healthy Maine
$ 3.6 Million loan from the General Fund (which will lose the people of Maine $180,000 in interest earned)
$ 9.2 Million from a Soft drink Tax (this includes Soda, syrups, powdered drinks such as iced tea, and some Fruit Juices)
$ 7.5 Million from a tax on Beer and Wine.
$ 110 Million over the next three years from a new 1.8% “surcharge” (TAX) on paid health insurance claims

All of this money is needed to keep funding the Dirigo Health plan that our Governor is so fond and proud of. If we look at the number of enrolled persons in the Dirigo plan, which is not easy to do as those who oversee it cannot agree on the number, we can see that this money will go towards about 14,000 individuals over all.

Time for my calculator folks, let’s take the first four items on the tax and spend list in full, and divide the Claims tax portion by 3. That comes to $61,966,666. Let me subtract the $ 3.6 Million loan, as I’m sure we’ll see that money again, and the $ 5 million from the Fund as we won’t see any taxes from that item that comes to $ 53,366,666 per year in new taxes.

Now correct me if I am wrong but as I see it and according to our Representatives each person on the Dirigo health plan needs $4,426.19 per year in subsidies to use this program. For some strange reason, I find that figure a wee bit high, but the numbers tell the tale.

Essentially, the Maine State Government is reaching very deeply into its citizen’s pockets to keep a failed pet project afloat. But that is not the worst of it by a long shot, no indeed, for I believe the cost associated with each and every person on Dirigo is far higher than just the $4,426.19 we as taxpayers fork over to them. Let us not forget what each and every one of those businesses and individuals pay out in premiums on top of the subsidies. What the average figure is remains a mystery, as anything government run tends to be shrouded in billowing clouds of bureaucracy and confusion, and said information is difficult to obtain.

For arguments sake let’s say that an average single person pays $30 a month in premiums to Dirigo. I am sure that a family rate would be higher but we’ll leave it at single payer rate for this. At $30 a month x 14,000 members the premiums come to $ 420,000 per month or $ 5,040,000 a year. Add that figure to the government funding and you get $ 67,006,666 Million or $ 4,786.19 per person to insure through this program. This doesn’t take into account the matching premiums that employers pay in at all.

Right, so what anyone with even the most rudimentary of math skills can derive from the above calculations is that the huge increase in taxes is for a very small portion of our overall population. That the cost associated with running the program far exceeds the programs effectiveness and need, and that quite frankly the Dirigo plan is a failure of outstanding proportions.

Are you outraged yet? No?

Well I’m not finished. Let me quote Josh Tardy Republican Leader of the House Republicans.

On the same day the Legislature passed this abomination, it killed a terrific insurance reform bill that would have lowered health insurance costs across the board, including for Dirigo,” said Rep. Tardy (R-Newport). “Rather than bring sanity to our insurance system, the majority party decided the thing to do was make matters worse.” Source

Hmmm, so there was a reasonable free market reform package put before Legislature that would have reduced costs across the board and the majority Democrats rejected it in favor of taxing it’s already over taxed population.

Not caring what these new fees and taxes will mean to the average household in Maine, and ignoring viable and affordable alternatives to the failed Dirigo health plan, the Democrats pushed through this bill late at night on April the 15th, appropriately tax day, to feed not only their over inflated egos and ideas of self importance but also to further their agenda of Socialized medicine. It seems that the Actual social welfare of ALL the people does not really matter to the Majority leaders and their followers.

If that doesn’t upset you nothing will and I guess you should start thinking about heading for the back pasture.

That is not to say that there is no recourse to us ignorant plebeians. As I write this there are two separate People’s Veto petitions before the Secretary of State calling for the repeal of this new tax law. Once the Secretary approves the wording on these they will be sent out to the petitioners who will then begin to gather signatures. 55,000 voters need to sign the petition to allow the item to become a ballot referendum. The Petitions should be available beginning next week. I have volunteered to be a signature gatherer and once I have my petition in hand I will be campaigning for the people of Maine to repeal this most egregious and distasteful tax. Please contact me if you so desire to sign said petition, in the hopes that we can show the Legislature, that we the people of Maine have had enough of their tax and spend policies. We can show them we are not going to bow to this kind of back room, late night dealing, which not only burdens us with more taxes, but deceives us as well.

Slainte’
Blighter

1 comment:

Anonymous said...

A lot of thoughtful work calculating and all that.
Yup, the adminstraion of insurance is a pricy deal.

It may have been better to just send a check to those 'qualified' and cut out the behemouth of the State administering this monster.

The real agenda for both the State and Insurance companies is that it employs a lot of people processing unneccessary paper work to make sure that no one is being 'cheated' or causing fraud.
I'll be that a good 25 or 30 % could be 'saved' in health care costs if they stopped paying high end auditors and accountants to insure lack of a billing error. All this costs more money than the actual need of people to get physicians care.
Good thinking... but with Baldacci, nothing will happen..
Good luck with the ranting though.
:)