NCPA - National Center for Policy Analysis

Universal Health Care May be Started by the States

February 24, 2004

States have a long tradition of laying the groundwork for incremental federal reforms in health care but have had less success in wining federal support for comprehensive approaches that achieve universal access, say experts.

Over the past decade, Maine has led the nation in growth in per capita personal spending on health care. Its hospital cost per discharged patient is higher than the U.S average. One of every eight citizens is without coverage, which results in $275 million each year in bad debt and charity care.

The new Dirigo Health Reform Act -- Dirigo is the state motto, "I lead" -- anticipates universal access there within five years. Dirigo Health is a new independent state agency to provide a health care program targeted to small businesses, self-employed persons and other individual consumers:

  • It will be funded through a combination of employer and employee payments, Medicaid dollars for those who are eligible and land an assessment on the gross revenues of health insurers; the state will limit health care costs through close state oversight.
  • A one-year moratorium, with an emergency exception, has been placed on certificate-of-need (CON) review; the CON program is also being extended to cover some non-hospital services, such as ambulatory surgical units, with the goal of controlling the growth of outpatient costs.
  • For the first-time, insurance regulation in the small-group market and the disclosure of prices by providers would be required.

Dirigo Health will be phased in over five years to cover all of Maine's uninsured residents, and state funds made available through federal fiscal relief will provide first-year financing, which will allow the early experience to determine the amount of insurers' assessments.

Source: Trish Riley and Elizabeth Kilbreth, "Health Coverage in the States -- Maine's Plan for Universal Coverage," New England Journal of Medicine, January 22, 2004.


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