Dirigo Health Doomed To Failure
By: Scott Simmonds, CPCU, ARM

January 9, 2006

Many of my clients and readers from other parts of the country have heard of Maine's experiment with a state health insurance system, Dirigo Health.

My Take: the socialistic nature of the program (control of supply, demand, and price) dooms it to failure. I have held this position from the beginning. I'm being proven correct.

Fewer than 2,000 previously uninsured Mainers have purchased coverage. The state has just added a surcharge on health insurance policies of $44,000,000 to pay for the program. That's an astounding $22,000 per previously uninsured person! Add the premiums paid for coverage for the 2,000 by employers and the insureds! Add to it the incredible increase in the Medicaid program that is included in Dirigo (21% of all Mainers under 65 are covered by Medicaid) and you have the most expensive, least productive insurance program in America.

The program is not reducing the number of uninsured - for every 100 new registrants to Medicaid only 4 were previously uninsured. Its not reducing the cost of healthcare, adding competition, improving quality of care or the availability of care in rural areas.

Proponents of the plan still think it can work. I thought that the failure of socialism in Europe in the 70s, 80s and 90s would have taught us all something!