Matt Jacobson's Blog

The Wall Street Journal weighs in on Dirigo

August 21, 2009

I ran across this great editorial in this morning's Wall Street Journal: No Maine Miracle Cure - Another state 'public option' that failed.

Here's an excerpt:

Then the state created a "public option" known as DirigoChoice. (Dirigo is the state motto, meaning "I Lead.") This plan would compete with private plans such as Blue Cross. To entice lower income Mainers to enroll, it offered taxpayer-subsidized premiums. The plan's original funding source was $50 million of federal stimulus money the state got in 2003. Over time, the plan was to be "paid for by savings in the health-care system." This is precisely the promise of ObamaCare. Maine saved by squeezing payments to hospitals and physicians.

The program flew off track fast. At its peak in 2006, only about 15,000 people had enrolled in the DirigoChoice program. That number has dropped to below 10,000, according to the state's own reporting. About two-thirds of those who enrolled already had insurance, which they dropped in favor of the public option and its subsidies. Instead of 128,000 uninsured in the program today, the actual number is just 3,400. Despite the giant expansions in Maine's Medicaid program and the new, subsidized public choice option, the number of uninsured in the state today is only slightly lower that in 2004 when the program began.

This is important reading, and worth considering how the lessons learned in Maine can extend to the rest of the country.