Kathleen Chase, Maine State Representative

Wednesday, July 9, 2008

(Op-Ed) Dirigo health meets the citizens' veto.

Dirigo health meets the citizens' veto.

By Rep. Kathy Chase

June 19, 2008 6:00 AM

http://www.seacoastonline.com/apps/pbcs.dll/article?AID=/20080619/OPINION/806190364

The campaign to force a citizens' veto on the new Dirigo tax is up and running, spearheaded by a coalition called Fed Up With Taxes.

If enough valid signatures are collected by July 17, the issue will go on the November ballot. Maine residents will then get a chance to kill this new tax — more than $50 million a year — that was instituted to prop up the failed experiment known as Dirigo Health.

Many political observers believe that if the citizens' veto accumulates enough signatures, the people who voted for this new tax (all except two who voted for it were Democrats — and I voted against it) will demand that the governor call the Legislature back for a special session.

They'll want to kill the tax themselves and remove it as an election issue. With opposition to this tax spreading like wildfire across the state, Augusta's big tax-and-spenders are running scared. A special session will cost the taxpayers about $40,000 a day in allowances and special session pay for legislators.

Eliminating the new taxes would not necessarily eliminate Dirigo itself. The program is the "signature" accomplishment of Gov. John Baldacci, and his Democratic allies in the Legislature would never let it perish while he is in office. Besides, as President Reagan once remarked, "The closest thing to eternal life on this earth is a government program."

If the taxes are removed by the citizens' veto or the Legislature, the Dirigo high command probably would revert to the unpopular but serviceable Savings Offset Payment to keep the program alive. Of course, if Dirigo were as critical as its proponents claim, the Legislature could finance it through the General Fund rather than pile the tax burden even higher on the overtaxed people of our state.

The citizens' veto is not an effort to kill Dirigo Health but to repeal the new tax on beer, wine and soft drinks, along with the 1.8 percent tax on so-called "paid claims" — essentially a tax on doctor's bills. The total damage to Maine people comes to between $50 million and $70 million a year.

My guess is that if the Fed Up With Taxes coalition can gather the necessary signatures to get on the ballot — some 55,000 — the people will pass it handily, because they really are fed up with taxes. They are not likely to be comforted by the way this tax came into being, either. The majority party sprang it as a surprise April 15, in the final days of the Legislature. That night, under the cover of darkness, they jammed it through the House and Senate on party line votes.
Worst of all, the Democrats did all this with complete disregard for legislative protocol. There was no public hearing or public input of any kind. This was a brazen, arrogant maneuver, and the Democrats deserve to have it blow up in their face. This is not how we do business in Maine.

The whole sorry episode might have been less odious if the new taxes were targeted to road repair or paying down Maine's $200-million debt to hospitals. But they are going to Dirigo Health, a program once hailed as "bold" and "historic," but which has turned into a stunning disappointment.

When the Legislature passed Dirigo in 2003, it was advertised as a self-funding program to provide affordable coverage to Maine's 138,000 uninsured residents. Five years later — and one year before the deadline to cover all the uninsured — the program enrolls just over 13,000 people, only 5,000 of whom were previously uninsured. We have poured more than $100 million into it, and now we'll pour in another $50 million to $70 million a year. That's a lot of money invested for a rather meager payoff.

Sadly, this all could have been avoided. The day before the majority party passed the Dirigo tax, it shot down on a party line vote a bill that could have lowered insurance premium costs across the board — including for Dirigo. That bill was LD 1047, titled "An Act to Lower the Cost of Health Insurance."

House Democrats attacked it during floor debate as "extreme," but it wasn't even controversial. It would have created in Maine the same kind of health insurance system already employed by the vast majority of states. In many states, people pay only a third to a half of what Mainers pay for the same insurance policies, often from the same companies.

Here are a few parting facts about Maine's broken insurance system to illustrate why we needed major reform. Maine families pay the second highest premiums in the country and carry deductibles seven times higher than the national average. Young people are leaving Maine because unaffordable group-insurance rates cause job loss. With LD 1047, premiums could be cut in half for individual coverage, and the chronically ill could get affordable coverage in a "risk pool." More insurance companies would have entered the Maine market, bringing stronger competition, more insurance options and lower premiums.

Instead of rolling the dice on an experimental program like Dirigo, and now taxing Maine citizens to pay for it, we could have had a superb system based on proven results. Unfortunately for all of us, the majority party said no.

State Rep. Kathy Chase (R-Wells) serves on the Legislature's Taxation Committee.