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By Hilary Schneider and Adam Thompson Monday, March 5, 2007

For the past 10 years, Maine has been a leader in progressive health-care reform. Where Washington has failed to act, Maine has stepped up to ensure its residents have access to affordable, quality health care. Other states have followed.

Massachusetts and Vermont enacted comprehensive reforms built on Maine's Dirigo Health Reform Act. A bill before Indiana lawmakers mirrors Dirigo reforms almost word for word. And in California, elements of Dirigo Health are found in Gov. Schwarzenegger's universal health-care proposal.

After Maine enacted Maine Rx in the late 1990s, which negotiates lower prescription drug prices from manufacturers, states across the country followed suit, much to the chagrin of the pharmaceutical giants.

But after a decade of leading the pack, Maine could fall behind unless Gov. Baldacci and the Legislature take Dirigo Health to the next level. Doing so would benefit all Maine people.

When Maine enacted Dirigo Health in 2003, The New York Times wrote, "on health care, Maine leads."

Maine became the first state to enact a plan for universal health care and to say that families earning less than $60,000 for a family of four should receive help in purchasing coverage.

Dirigo was the first comprehensive approach to health-care reform, with initiatives to improve quality of care and reduce costs while expanding access to coverage.

Dirigo offered subsidized insurance to small businesses and individuals, marking the first time individuals could buy the same insurance at the same price as small businesses.

So, where can Maine go from here to stay a national leader?

A natural next step for Dirigo's subsidized insurance program, called DirigoChoice, is allowing it to self-insure. This would end the complicated relationship with the for-profit insurance company, Anthem Blue Cross and Blue Shield. After all, Anthem was a party in two failed court challenges to the funding source for DirigoChoice, which captures savings through an assessment on insurers.

A self-insured DirigoChoice could spend more on subsidies and health care instead of Anthem's profits and administrative costs. In 2005, Anthem posted $41 million in profits, yet it is still raising premiums by double-digits.

State Rep. Jill Conover, D-Oakland, has submitted legislation to allow DirigoChoice to self-insure. This also is supported by the governor's blue ribbon commission.

The primary funding source for DirigoChoice, called the savings offset payment, should be preserved. Yes, it's complicated and contentious, but the courts have upheld it twice. And it is only paid if there are savings in the health-care system.

The governor's blue ribbon commission proposed additional funding sources that should be combined with the offset payment. This would allow DirigoChoice to enroll more Maine families and businesses.

The commission proposed increases in so-called sin taxes on tobacco and alcohol. Although these disproportionately affect lower-income residents, they are proven, for instance, to reduce smoking rates.

Lastly, Maine could take a cue from Massachusetts and Vermont and give employers a credit for offering a certain level of health coverage, or pay a fee to the state, so-called "pay or play." If it accounts for the true cost of coverage, these contributions would enable more people to get coverage. The requirements could be weighted to company size and exempt small employers in their first years of business.

Health-care reform is complex and difficult. Maine knows this better than any state. But, as Baldacci said when he proposed Dirigo Health in 2003, "health-care reform is no longer a priority, it is a necessity."

Maine can learn from its own example and be bold once again in 2007.