NCPA - National Center for Policy Analysis


August 27, 2008

New taxes to support Dirigo Care, the Maine state government's attempt at providing universal health care, have so angered Maine residents that a coalition dedicated to repealing the tax increases was able to collect nearly twice as many signatures as required to put a repeal referendum on the state's ballot for November, says

Originally, voters were assured that Dirigo would never require an increase in taxes; however, that has not been the case:

  • Dirigo Care has cost the state's taxpayers nearly $164 million in the four years since its inception.
  • Although its intended purpose was to insure 128,000 people who had no health coverage, only four percent of that total, or just over 5,000 individuals, have been successfully removed from the rolls of the uninsured and into that state program.
  • On April 15, 2008, Gov. John Baldacci (D) signed LD2247, An Act to Continue Maine's Leadership in Covering the Uninsured, expanding the Dirigo Care program by $28 million annually.
  • Moreover, taxpayer are footing the bill, as the state levied a 1.8 percent tax increase on paid insurance claims, raised taxes on alcohol and increased tax rates on tobacco.

But this "doesn't make a lot of sense," says Devon Herrick, a senior fellow with the National Center for Policy Analysis. "Tobacco taxes fall predominantly on low-income households, so raising tobacco taxes to fund health insurance is akin to taxing the poor to provide coverage to the poor," Herrick continues.

However, Dirigo Care supporters say repealing the new taxes would take away health coverage from 18,000 Mainers and remove subsidies that make individual health care coverage more affordable for 40,000 more.  But if the state were seriously interested in increasing the number of insured Mainers, says Herrick, it would work to make coverage more affordable.

Source: Krystle Russin, Maine Residents Angered by Expansion of Dirigo Program Subsidy,, August 25, 2008.

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