Peter Geaghan and his brothers Patrick and Larry Geaghan (both not pictured) co-own Geaghan's Pub in Bangor. They were opposed to the beverage tax repeal which was voted in Tuesday, November 4. " The funding [from the beverage tax] was very helpful," said Geaghan whose dozen employees at the restaurant are enrolled in the state's Dirigo Choice health plan. " If the rate [for the plan] changes it will be unaffordable, " he added. Buy Photo
Bangor restaurateur Peter Geaghan offers health insurance to 10 of his employees through DirigoChoice.
But on Wednesday, the day after Maine’s voters resoundingly overturned the new beverage tax that would have helped fund the state’s health insurance program, Geaghan already was looking for other options to keep his workers healthy.
“My concern is the fear of the unknown,” the co-owner of Geaghan’s Pub said. “Is the funding just going to dry up and be nothing? I’m finding, shopping around, that there’re other plans out there. But the deductible is higher, and the coverage really isn’t as good.”
Geaghan joins many Mainers who are wondering what the future of Dirigo will be.
Tuesday’s Dirigo beverage tax repeal, which passed with 64 percent of the vote, means that the health insurance program will revert back to its current funding source. That source is the unpredictable and unpopular savings offset payment, which taxes insurers based on the state’s estimated cost savings from the insurance programs.
The new law was overturned after a more than $3.5 million campaign that was subsidized by out-of-state beverage companies. The law would have replaced the savings offset payment with a 1.8 percent surcharge on health insurance claims and the new excise tax on beer, wine, soda and other sugary beverages.
But now the savings offset payment method is in jeopardy, too.
The Maine State Chamber of Commerce filed a lawsuit two weeks ago that challenges the state’s $48.7 million 2007 savings offset payment, and Dirigo advocates are worried.
“If they are successful, there will be no funding,” Joe Ditre of the nonprofit group Maine Consumers for Affordable Health Care said recently. “This is a direct attack on the only remaining funding source.”
Kristine Ossenfort of the Maine State Chamber of Commerce argued that DirigoChoice warrants a closer look by the state.
“If it’s going to survive, it needs to be restructured,” she said. “If people are struggling with their own health insurance costs, taxing their own health insurance programs won’t make it more affordable for them. It will make it less affordable.”
One health policy expert said that DirigoChoice is very polarizing and that the repeal of the beverage tax may be a signal that it’s time to reassess the program’s efficacy.
“Dirigo had a fairly significant startup investment. … And some people are quick to point out that Dirigo was supposed to have many, many tens of thousands of people enrolled when it was first conceived,” said Gino Nalli of the Muskie School for Public Service at the University of Southern Maine. “My sense is that Dirigo will continue to limp along until a new administration will come in, in 2010.”
In fact, the DirigoChoice plan now provides health coverage to about 11,500 members. About 5,500 more Mainers are covered under the associated MaineCare Parent Expansion program.
Advocates of DirigoChoice said in a statement released late Tuesday night that though they were disappointed to revert back to the savings offset plan, they will work toward finding reliable funding for the program’s members.
“There is a lot of momentum in Maine to continue working on our problems with health coverage and especially keeping our kids healthy,” said the coalition members, who include Maine doctors and nurses. “We are excited about looking ahead, and we welcome the beverage companies to our conversation — we hope that instead of fighting us using $3.7 million they will now step up to the plate and be part of the solution instead of part of the problem.”
Many small-business owners opposed the beverage tax that Mainers rejected Tuesday, but not Geaghan.
“It wouldn’t have put me out of business,” he said of the tax. “The fact is, if we truly want to insure people or we truly want a better education system or a cleaner environment, it’s going to cost money, and you can’t just print more money.”
Geaghan said he was skeptical of the motives of the large beverage companies that gave millions to overturn the beverage tax — and added that although providing health insurance takes money, the alternative is costly, too.
“I don’t think they have my employee — the guy I look at every day — his best interest at heart,” the restaurateur said. “We treat our employees as best we can. It’s an investment for us.”
On 11/6/08 at 1:29 AM,
bassman4447 wrote:
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great news close the dirgio money pit....
On 11/6/08 at 4:11 AM,
freedomfighter wrote:
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I guess the working poor will have to learn to live without health insurance. If they get sick they will have to quit their job and go on Mainecare. Either way it's expensive and somebody has to pay for it. Hopefully Obama will have a better plan anyway and Dirigo won't be needed anymore.
On 11/6/08 at 5:05 AM,
MaineMom73 wrote:
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Then everyone should be *really* happy Obama was elected then. Read the bottom of page 2 beginning of page 3.
On 11/6/08 at 5:11 AM,
thekingofmaine wrote:
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I agree bassman4447... an uneeded, unnessecary program that did nothing and accomplished none of its initial goals. Nobody was covered. Baldacci said 50-75,000 mainers would be covered. 11,500 are.
big whoop
On 11/6/08 at 5:37 AM,
moosetopia wrote:
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Do like I do with a hospital bill. We are uninsured. We had insurance and were paying 130.00 a week for CIGNA which covered NOTHING basically and we were still left with a bill... So now when I get a bill, I make payments to the hospital instead of the insurance company. As long as you are making payments to the hospital, there's nothing they can do about it.
On 11/6/08 at 5:56 AM,
centralmaine wrote:
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Why would the beverage companies want a seat at the health insurance table? They were unwillingly made the targets of Dirigo Health. Every person or entity that makes a profit is now fair game for any government program designed to redistribute their wealth. This is an extremely dangerous track that we are on.
On 11/6/08 at 6:27 AM,
gw2kpro wrote:
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Maybe the BDN can fund his worker's health insurance. This is a huge, "rich" organization, after all. They seem to have quite a stake in this issue, and it would be patriotic for them to do so given the BDN's level of interest in the topic.
On 11/6/08 at 6:40 AM,
garysavard wrote:
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I manage a small company, and we pay 60% of health and dental insurance costs for employees and their families. We currently have Anthem. We looked into Dirigo when it came on line and didn't really see it as a great money saver, overall. Dirigo is a failed program that needs to be put out of it's misery. There are other options for those insured with Dirigo besides everyone in the state subsidizing their health insurance through gimmicks and taxes.
On 11/6/08 at 6:41 AM,
Joshua wrote:
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Now that we've gotten rid of a lot of the trash in Washington, I doubt it will be very long before we have some measure of nationwide reform on healthcare anyways. This repeal was expected, though, Mainers usually only look out for themselves, .most of the people here are really "grab-what-you-can-get", so saving a few cents on a can of soda was obviously going to be more important to them.
On 11/6/08 at 6:44 AM,
Joshua wrote:
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Now that we've gotten rid of a lot of the trash in Washington, I doubt it will be very long before we have some measure of nationwide reform on healthcare anyways. This repeal was expected, though, Mainers usually only look out for themselves, .most of the people here are really "grab-what-you-can-get", so saving a few cents on a can of soda was obviously going to be more important to them.
On 11/6/08 at 6:54 AM,
kevin77 wrote:
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Regardless of how much $$ the beverage companies put into the campaign it the vote in this issue would have been the same.
On 11/6/08 at 7:00 AM,
MaryAnn wrote:
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Geaghan is obviously a good man who cares about his employees. He deserves an affordable method of providing health insurance for his workers; Dirigo is not it. If you think this form of socialized healthcare is messed up now, wait until Obama tries to make it work on a national level. Better ideas on how to solve Maine's Healthcare coverage can be found on the Heritage Foundation's website: http://www.heritage.org/Research/HealthCare/bg1878es.cfm
On 11/6/08 at 7:18 AM,
sickntired2 wrote:
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Can I get the beverage industry to cover some of the cost of my health insurance? What my employer does not cover, I have to pay for. I don't get a "helping handout" just because. Makes me think some of the Dirigo covered people should have gotten a better education, thus getting a better job, thus having health insurance. Not many jobs cover their employees & families at 100% coverage. MOST of us have to pay a percentage.
On 11/6/08 at 7:20 AM,
pcme2000 wrote:
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MaineMom73 I am sure that you remember that every Pres. that has been elected in the last 20 yrs has said before they got elected that if I am elected I will have medical coverage for everyone. And lets see we still don't have it. Obama is no diffrent he just promised things that he can't make come true.
On 11/6/08 at 7:24 AM,
boogyman wrote:
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Why is it that a private health insurance policy in CT. costs 1/4 of what it does in Maine? The primary reason is that Maine Laws are not allowing for competition in the market place. As far as not wanting to pay a "few extra cents for soda" as Joshua puts it, for one thing the law taxing beverages to fund Dirigo choice was passed in the dark of night with no public notice or input. Don't know about you, but we let these theives in Augusta get away with that once, everything will eventually have a "few extra cents" tax added to fund somebodys pet project. I wonder how Mr. Geaghan would have felt if instead of passing a law in the middle of the night taxing beverages, they passed a law taxing restaraunt meals?
On 11/6/08 at 7:35 AM,
homer2 wrote:
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Boogyman is right. Let's fix the laws. Open competition is what controls prices. Dirigo has failed. The gov should eat crow or perhaps collect the extra money needed by putting the state employees in the plan.
On 11/6/08 at 7:47 AM,
sck1198 wrote:
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This won't be a problem for long.
With the Domocrats in total control of Maine State government, it will be paid for by an increase in the state Sales Tax to 9 or 10%.
On 11/6/08 at 8:00 AM,
Bangorian wrote:
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It's too bad that Mainer's are so short-sighted and afraid of government programs. Is it really that big a deal to pay 5 extra cents for your coffee brandy to help someone insure their family?
On 11/6/08 at 8:06 AM,
nixonwasmyhero wrote:
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Maybe I should just quit my job, go on disability because iI have anxiety, and get Maine Care to pay for my medical needs. Then I'll be just like a lot of other deadbeats in this state that expect the government to meet their every need. Why not? It's not like there is any oversight in this area whatsoever!
On 11/6/08 at 8:28 AM,
RevGerald wrote:
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The World Health Organization says that the best healthcare is in France and it costs half of what US healthcare costs. Nixonwasmyhero should read some history ....He was one of the first presidents to advocate singlepayer national health care.
On 11/6/08 at 8:35 AM,
Bangorean wrote:
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My wife and I, healthy, were paying $1,400 a month to United Healthcare at age 50. Cigna is $900.00 a month. It's all a matter of which "pool" you're swimming in. Now we're looking at becoming "ex-patriates" and living outside the U.S. 183 days a year, and getting healthcare insurance from SRI for $1700 per year. Not because we want to, just because we may have to in order to carry any form of insurance over the next 10 years. Yes folks, the U.S. healthcare system - the giant, money-grubbing insurance industry, with multi-millionaire executives and CEO's, is raping the American consumer. Every level of that monster takes a cut and increases the cost of your healthcare dollar. The layer of cost and expense added between an individual and his or her provider is obscene - and not just the direct expense. Hosptials and Doctors all have to have a staff on hand conversant in the asinine paperwork and detail necessary to collect on "health insurance claims." The healtcare insurers themselves do everything in their power to deny claims. The costs are passed, and fairly so from the provider's perspective, directly to the consumer.
On 11/6/08 at 9:03 AM,
Katofbangor wrote:
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while on the topic of health insurance, EMMC hsa just annouced that the non-union employees will not be paying for health insurance beginning Jan 09. While to pay for your own health care is not unusual these days(EMMC had always offered paid insurance for ALL full time employees for many,many years), to place the obligation ONLY on the non-union employees has cuased quite a stir among the employee population at emmc. I believe the next time a union approaches the non-union employees there, it will supported in a BIG way.
On 11/6/08 at 9:14 AM,
kboot73 wrote:
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"moosetopia" you are correct! You can make a very low payment monthly. they figure they will get their money eventually.
On 11/6/08 at 9:21 AM,
Joshua wrote:
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Dirigo is not a "socialized" system, it is a subsidized form of private insurance, because no one can afford insurance here unless you work for a major corporation. Also, it is true that the health insurance premiums in CT are lower, but the plans that they are offered suck. Competition doesn't alway lower prices, in some cases it causes them to be higher. Now, here in Maine we pay quite a bit, but it's mainly because we rely on private insurers but force them to provide equitable coverage to the policyholders they have here in Maine, thus there is less competition, but the point is that there is still competition. Companies like Anthem are able to charge more here and take those extra dollars out-of-state to states with more competition, because they cannot charge as high a premium in states like CT or NH. The only way to "fix" the problem of cost here is to nationalize the insurance system, because it represents a natural monopoly, which is not a new concept by any means, we've been doing it for years with the electric and land-line telephone companies. The cost of an insurance company's adminstration represents an economy of scale, because the more companies there are the more administration is needed. Medicaid (which anyone who has been on it knows it covers almost everything) has an administration cost of less than 5%, which is roughly in line with the administrative cost of healthcare systems in most countries with some form of nationalized healthcare. The private insurance industry, by contrast, carries an administrative cost of anywhere from 15-50% depending on the type of insurance it provides (HMO vs. PPO, etc). This is because competition requires more administration for each different company. In a single-payer system administrative personnel, especially top execs., can be exploited much more effectively because they all work for the same company and there is no need to hire ten or twenty different CEOs all making millions of dollars per year, dollars that come from policy-holders who expect to have their needs covered with that money. The point raised by Bangorean is a good one as well, because any for-profit health insurance provider must deny benefits to reap a profit, thus they must hire claims adjustors and lawyers to seek out ways to screw their customers out of the coverage they have paid for, and claims adjustors and lawyers don't come cheap, either. Health insurance is a zero-sum game, there is no way to "lower the cost" of providing health insurance, at least not for private insurers, so all profits are inversely related to the equitability of their insurance plans. Realize that CEOs have no responsibility to you, your health, or society at large; their only responsibility is to make money for their shareholders. Anyone who honestly believes that Anthem or Cigna is going to put aside profit to make sure you stay healthy is an idiot, and deserves whatever they get out of America's healthcare system. When you are sick and dying before your time, as more Americans do than citizens of any other industrialized nation in the world, remember who is responsible.
On 11/6/08 at 10:28 AM,
MaineMom73 wrote:
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Personally, I don't see why everyone shouldn't have the BEST healthcare. You're right if you think I want the same insurance Hillary Clinton gets, or Susan Collins. We send aid to third world countries. Surely, we can take care of every american's health? And, how low is it to say that taking care of "everybody's" health is socialism or communist or whatever. I mean, to me it's human decency to make sure other humans are healthy too especially the ones in our country. Since when do we call healthcare "socialism"? If France is considered the best in the world- there has to be a signifant reason the rest of the world sees them as so much better regarding the health of their citizens. America sure as heck doesn't have the best healthcare.
I think there is a better solution than Diringo in general. Sorry, but why should some people pay for Diringo when they don't even offer it to everyone and it seems closed off to individuals and some business. http://www.dirigohealth.maine.gov/Pages/visitor_land.html Only 15,000 are on this healthcare. Anyone see the salasries for State employees, some from the Govenor's office? How about around 120,000.00 per year. One person's salary is 249,000. Her name is Marjorie. Give a 1/4 of her salary to Diringo.
On 11/6/08 at 10:41 AM,
HermonMom wrote:
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This whole issue is really about our government not allowing the people to have a voice. This isn't about health care. That is just what the media made it about. The law that was repealed wasn't just about taxes on beer, wine & soft drinks. It was a "surcharge" on all insurance claims paid by the insurance companies. Those of us with employer insurances would pay more in health care premiums to cover this surcharge that would most certainly be passed from the insurance company to the employer and ultimately, to me. Why can't these lawmakers stop hiding things within the laws they pass? One law, one issue, one vote. Maybe because they'd have to do a little more work and vote more often. All the laws that are passed state and nationally have so much other crap in them, it is almost impossible for lawmakers to vote for something you believe in, without voting for something they don't. If the state wants to pass a tax, do it in the main stream, light of day. Don't hide it from all of us and then expect us to just take it. Mainers are smarter than that.
On 11/6/08 at 11:47 AM,
glenna wrote:
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I've always found that a lot of government business goes on "in the dark" - meaning in ways the public/the voters never see (or in language the average person doesn't understand). BUT, if newspapers/media don't actually send reporters to Augusta to report what is going on, if people don't MAKE IT A POINT to go consistently to city or county council/selectmen meetings - no matter how long they last - no matter how boring they are - then a lot of "in the dark" business will go on and the voter/taxpayer will never know and the same people will be re-elected and sent back to continue doing business "in the dark." Face it, people, you get the kind of government you deserve because you don't make it a point to shine a spotlight on government all the time! After-the-fact complaining won't change the way government is conducted. Only participatory electorate involvement will change the way government operates.
On 11/6/08 at 11:51 AM,
LMarshall wrote:
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Let's face it, Dirigo is a great idea, but unfortunately it does not work. It's a failure and is costing us all a small fortune to pay for others health care. We already pay a fortune for our own insurance -for those of us who can afford it or work for a large corporation, then we still have to pay out the ***.
Baldacci is trying to make it look like Dirigo is working, but if that's the case why is it he's hiding what he's taking from the general fund to support this failed cause? To make it worse, he's not paying the money back as required by law. In the simplest term, Baldacci is stealing from us to pay for this failed venture he and our legislators have created. Read this article for more details:
If this isn't reason enough to get rid of Dirigo, then I don't know what is.
On 11/6/08 at 1:03 PM,
boogyman wrote:
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Glenna is absolutely correct. I bet a majority of Mainers can name more winners on American Idol than can name all of our state senators and representatives. Seriously, how many of us even know how our own representatives voted on the Dirigo choice funding? We have no one to blame but ourselves and our own apathy toward what our elected officials are doing for the mess this state is in.
On 11/6/08 at 1:53 PM,
MaineCitizen_too wrote:
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I thought Dirigo was a good idea until I found out it was a subsidized system. If it helped all people and not just certain people, I bet it would have more support. However, while people are loosing services and paying more money and going into poverty levels paying for others to get services, the program will not get the support it needs. I think people are tired of paying taxes and going towards poverty to see others get services.
On 11/6/08 at 2:18 PM,
nezimaine wrote:
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Shame that the writer confuses health and medical terminology. The employer may encourage that employees do what is healthy but it is really an individual responsibility. The medical care one needs which may be provided through insurance or by self-pay is entirely different. The premiums are a sharing of costs after the deduction for administrative and sales costs. Fairly efficient. The fact that some employers may no longer be subsidized merely means that they and their employees will have to recognize the real cost of their insurance.
On 11/7/08 at 9:56 AM,
Bangorian wrote:
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Having lived in CT I can tell you that health insurance is less expensive. However, the cost of living there is through the roof and most mainer's couldn't afford it (we are afterall talking about the richest state in the country). You might take some satisfaction in knowing that car insurance is two or three times the cost in CT as it is in Maine.
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