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Maine to try universal coverage

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AUGUSTA, Maine — Other states have tried — and failed — to create universal health care. Now Maine intends to show them how it's done.

This summer, Maine will begin enrolling people in its health care program, called Dirigo — the state motto and Latin for "I lead." It is aimed at ensuring access to health care for all 1.3 million residents.

Under the purely voluntary program, people will be able to get health coverage through private insurers at rates subsidized by the state and participating employers.

The program is fraught with uncertainty: How much will it cost when it is fully in place? How many employers will participate? How much they will have to contribute? And perhaps most important: Can the state pull it off as planned without a broad-based tax increase on individuals or businesses?

"Making something like this work anywhere is an experiment. And we will all learn in the process," said Jay Wolfson, professor of public health and medicine at the University of South Florida.

The program is designed to fill the gaps between private insurance and Medicaid that leave 160,000 people in Maine uninsured. It aims to sign up 31,000 people this year. All uninsured residents would have access by 2009.

"No other state currently has as far-reaching a plan as Maine," said Howard Berliner, a health policy professor at the New School University in New York City.

The plan was championed by Democratic Gov. John Baldacci, who made universal coverage a cornerstone of his 2002 campaign.

Even with the modest initial goal, the program will cost about $90 million in its first year, according to the Baldacci administration. But beyond that, the costs are unclear.

Officials are banking on voluntary contributions from employers who want to provide coverage to their workers, as well as $52 million in one-time federal money to start up the program. The state also plans to pay for the program with the money its saves by holding down runaway medical costs. It hopes to save $80 million a year by eliminating unreimbursed medical costs run up by uninsured people, and will try to persuade hospitals and other providers to impose price caps.

The uninsured will have to pay premiums to join Dirigo, or obtain coverage through their employers. It is not yet clear how much people will have to pay, but the premiums will be on a sliding scale based on income.

In addition, Maine's Medicaid program will be expanded to cover more poor people. Maine also has a program called Maine Rx that uses the state's buying power to force drug companies to offer bulk discounts on prescription drugs for the elderly, the working poor and others.

The key to success will be how many employers sign up, those familiar with the program say.

"The cost is a driving issue," said Dana Connors, president of the Maine State Chamber of Commerce and a Dirigo board member.

The state has no choice but to make it work, said David White, owner of an import car repair shop near Bar Harbor. White said he gave up his pay for six months to make sure his three employees kept their health coverage.

Maine is "in a financial crisis largely due to health care," said White, who helps advise Dirigo's watchdog panel. "You want an economic stimulus package? Fix health care."

Other states have followed their own routes, with mixed success.

Hawaii, which has recently patterned a program after Maine's, tried requiring employers to provide insurance for their workers in the 1970s, but was blocked by the courts.

Massachusetts and Oregon both adopted "pay or play" laws that required employers to provide insurance or pay a tax to help cover the uninsured, but both were repealed. Oregon went a step further by expanding Medicaid coverage, but that was cut back.

Washington's "pay or play" approach faltered, but its program of sliding-scale health-care subsidies still makes Washington among the leaders in the field.

Berliner has his doubts about the prospects for success in Maine: "The voluntary nature of the Maine approach is intriguing — but may ultimately be its Achilles heel."

He said many employers will probably choose not to participate, and their employees will end up getting expanded coverage under Medicaid — which would ultimately raise taxes.