123rd MAINE LEGISLATURE
		LD 431		LR 356(02)
	An Act To Enable the Dirigo Health Program To Be Self-administered
	Fiscal Note for Bill as Amended by Committee Amendment "     "
	Committee: Insurance and Financial Services
	Fiscal Note Required: Yes
Fiscal Note
Potential current biennium cost increase - General Fund Potential current biennium revenue decrease - General Fund Potential current biennium savings - Dirigo Health Enterprise Fund Minor cost increase - Other Funds
Fiscal Detail and Notes
The bill gives authority to Dirigo Health to provide access to health benefits coverage through a self-administered plan after the Dirigo Health board evaluates bids for self-administered and fully insured benefits coverage.  The board's decision to convert to a self-administered plan could result in:
	> The State bearing additional financial liability if the reserve and stop loss insurance provisions required in the bill prove to be inadequate;
	> The General Fund losing insurance premium tax revenue of approximately $1.8 million to $2 million per year annualized (based on Dirigo 2008-2009 proposed budget premium assumptions) if a conversion takes place. This loss in revenue may be partially offset by a minor increase (i.e., less than $50,000) in corporate income tax revenue paid by the 3rd-party administrator Dirigo may use to administer the plan; and
	> Based on estimates from the Dirigo Health Agency, result in net savings to the Dirigo Health program of approximately $3.9 million per year on an annualized basis primarily from savings in administrative costs, greater plan design flexibility, and not having to pay the insurance premium tax.
The additional costs to the Dirigo Health Program from other changes made in the bill can be absorbed by the program utilizing existing budget resources.  The additional costs to the Bureau of Insurance in the Department of Professional and Financial Regulation can be absorbed by the bureau utilizing existing budget resources.