A new funding mechanism for the state’s Dirigo health insurance plan won Senate approval yesterday.
A bill introduced by Sharon Treat (D-Hallowell) establishes a fixed 2.14% tax on paid claims that supporters say will bring stability to the program, according to the Kennebec Journal. The tax is paid by health insurance carriers but can be passed on to consumers through their premium payments.
It replaces a complicated funding mechanism that included a variable tax on paid claims that could go as high as 4%. The new finding mechanism is expected to generate $42 million a year for Dirigo. Last year, a people’s veto defeated an attempt to tax beverages to provide a stable funding source for the program, which has been problematic since its inception in 2003.
