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The curious high-risk case of Janet Mills’ Obamacare exchange decision

Left: DHHS Commissioner Jeanne Lambrew, Center: Governor Janet Mills, Right: Former Baldacci administration official and Dirigo Health Chief Trish Riley, all at Governor Mills’ “All In” health care forum on August 29.

AUGUSTA – When Governor Janet Mills announced that she would host a forum on health care on August 29th to include a discussion about health insurance marketplace ideas and brought in health care policy professionals from around the country, it was not clear that her mind was already made up about the direction she intended to take.

But less than an hour after the forum had been scheduled to end, Mills announced her plan for Maine to launch a state-run health insurance marketplace. Along with it, Mills announced she had filed a request with the federal government to begin the process of seeking the waiver and establishing a state-based health care exchange.

The forum featured two health policy officials who have been at the center of high profile health coverage failures in Maine and at the national level.

Featured participants at Mills’ forum came from across the eastern United States, including:

– A Vice President of the Kaiser Family Foundation out of Washington D.C.

– The state of Pennsylvania’s current Insurance Commissioner.

– An Assistant Director at the National Association of Insurance Realtors out of Washington D.C.

– A lecturer and director from State Health and Value Strategies in New Jersey.

– The policy and strategy chief at Massachusetts Health Connector.

– The Founder of Town Hall Ventures and former Obama administration official, who was named by Healthcare Dive as America’s “Most Influential Healthcare Tweeter.”

Only three of the fourteen featured participants Mills announced for her event were from Maine.

The announcement by Mills, which was clearly predetermined despite the initial attempt by the administration to look as if they were seeking stakeholder input, does not come without pitfalls.

Some states, such as Minnesota, had serious difficulties with their exchange, which failed to allow many applicants to apply for insurance due to staff issues, untested software and other complications.

Through the end of 2017, the state of Vermont’s health care exchange was in jeopardy after reportedly spending more than $200 million on the exchange but failing to meet enrollment benchmarks.

Nevada is now attempting to move to a state-run exchange website after initially failing to successfully do so. State officials say that a state exchange will cost the state half of what relying on the federal exchange website costs.

For Maine’s part, Governor Janet Mills’ letter to federal officials says that the state will seek to create a state exchange on the federal government’s platform in 2021 and transition to a fully operational state-based exchange effective in 2022.

A state-based exchange will mean some significant changes for Mainers who currently purchase health insurance through the federal exchange, including tax implications. Small businesses that purchase through the federal exchange will also be impacted.

Interestingly, one attendee at Governor Mills’ forum was Trish Riley, the former health policy official under Gov. John Baldacci who oversaw Maine’s failed Dirigo Health program.

Dirigo Health, which was discussed by national experts as a forerunner to the Affordable Care Act, was widely seen as a failure. At one point, the program was covering just 7,300 people through a tax on the health care bills of more than 700,00 Mainers.

While Riley and others touted the federal matching funds component of the program, others pointed to the failure of the program to ever meet projected enrollment. Officials initially projected that Dirigo would cover more than 130,000 Mainers by 2009, but as of the November 2009 report, only 8,636 Mainers were actually enrolled. Growth had slowed to a crawl at that point as well, with only 24 new enrollees in Dirigo in that report.

Riley left her post in state government as Governor Paul LePage took office. Dirigo Health was phased out in the years following. It is unclear if Governor Mills will bring Riley into the fold on Maine’s state-based health insurance exchange implementation.

Maine’s current Medicaid expansion, while not missing the mark as miserably as the Dirigo Health projections, has also failed to enroll the number of individuals promised.  A June 2019 report by the Associated Press said that somewhere around 33%-50% of Mainers who were projected to enroll in Medicaid under the expansion had actually done so in various parts of the state.

Critics of the Dirigo Health program said the projections of the number of individuals who would enroll in private insurance were overblown because the program was coupled with a similar Medicaid expansion which caused many Mainers to drop their private insurance. That situation, an expansion of Medicaid with a push to a new state run insurance program, closely resembles the path Governor Mills is suggesting she will embark on in 2022.

Controversy has also surrounded the cost of the expansion, with Governor Mills dedicating funding to the expansion before it was officially appropriated by the legislature, and concerns that her projections on the overall cost were too low due to overestimating the impact of federal funds.

In her letter to the federal government announcing the intent to take control of Maine’s health insurance exchange, Governor Mills authorized Maine DHHS Commissioner Jeanne Lambrew to act on the state’s behalf to bind the state and to work on the blueprint of the exchange.

Lambrew was one of the Obama administration officials who took heavy criticism for the initial failures of the Affordable Care Act’s federal exchange.

A memo from Harvard’s David Cutler, an early Obama health policy advisor, said Lambrew was “not known for operational ability, knowledge of delivery systems, or facilitating widespread change.” Cutler had been attempting to raise awareness in the Obama administration that they were “behind the curve” on major reforms and that Lambrew and other senior staff were not “up to the task.”

Now Lambrew will lead Maine’s state exchange effort.

Mills has made health coverage a primary focus of her administration, but a major misstep, either the sort that Trish Riley oversaw with Dirigo Health or that Jeanne Lambrew supervised in the early days of the Affordable Care Act could have costly financial implications for Maine taxpayers, and political ramifications for Mills.

When announcing her plan, Governor Mills said she “looked forward” to working in a bipartisan manner to pass additional legislation in the coming legislative session.

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