123rd MAINE LEGISLATURE
		LD 1890		LR 2620(02)
	An Act To Make Health Care Affordable, Accessible and Effective for All
	Fiscal Note for Bill as Amended by Committee Amendment "      "
	Committee: Insurance and Financial Services
	Fiscal Note Required: Yes
Fiscal Note
			2007-08	2008-09	Projections 2009-10	Projections 2010-11
Net Cost (Savings)
	General Fund		($1,036,716)	($1,513,335)	($1,499,884)	($1,488,169)
Appropriations/Allocations
	General Fund		$88,000	$0	$0	$0
	Other Special Revenue Funds		$273,859	$183,279	$192,390	$202,002
	Dirigo Health Fund		$35,649,622	$44,811,247	$24,272,863	$24,319,644
	Maine Individual Reinsurance Program Fund		$0	$18,483,552	$18,496,694	$18,511,467
Revenue
	General Fund		$1,124,716	$1,513,335	$1,499,884	$1,488,169
	Other Special Revenue Funds		$60,443	$81,328	$82,272	$81,630
	Dirigo Health Fund		$35,649,622	$63,294,799	$42,769,557	$42,831,111
Transfers
	Dirigo Health Fund		$0	($18,483,552)	($18,496,694)	($18,511,467)
	Maine Individual Reinsurance Program Fund		$0	$18,483,552	$18,496,694	$18,511,467
Fiscal Detail and Notes
	This bill increases General Fund revenue by $1,124,716 in fiscal year 2007-08 and $1,513,335 in fiscal year 2008-09 due to an increase in sales tax resulting from the increase in the tobacco taxes.  This bill also includes a General Fund appropriation of $88,000 for the administrative costs associated with the cigarette and tobacco product tax increases.
	This bill would eliminate the Saving Offset Payment, one of the funding sources for the Dirigo Health Program, beginning with the assessment effective July 1, 2008, and replace this revenue with a hospital surcharge and the increase in tobacco taxes. For the purposes of this fiscal note, the baseline assumption for future year Saving Offset Payments is the $34.3 million Saving Offset Payment assessed for the year beginning  July 1, 2007. For the first year of the Saving Offset Payment elimination (fiscal year 2008-09) only 40% of the new Saving Offset Payment is assumed to be collected, and therefore lost, in that year.
	The bill would create the Maine Individual Reinsurance Program within the Department of Professional and Financial Regulation.  The program is to be funded by a transfer of 24% of Dirigo's share of the revenue generated by the tobacco tax increase and the hospital surcharge.
	The bill also includes an Other Special Revenue Funds allocation for Bureau of Insurance costs related to implementation and management of the reinsurance program and other requirements of the bill. This includes the costs of a Managing Insurance Examiner position, an Insurance Actuarial Assistant position, related administrative costs, and for consulting services.
Dirigo Health Fund Summary			2007-08	2008-09	Projections 2009-10	Projections 2010-11
Revenue Changes:
	Elimination of the Savings Offset Payment		$0	($13,720,000)	($34,300,000)	($34,300,000)
	Hospital Surcharge		$0	$29,000,000	$29,000,000	$29,000,000
	Tobacco Tax Increase		$35,649,622	$48,014,799	$48,069,557	$48,131,111
	Subtotal Revenue Changes		$35,649,622	$63,294,799	$42,769,557	$42,831,111
Transfers:
	To Reinsurance Program from Hospital Surcharge		$0	($6,960,000)	($6,960,000)	($6,960,000)
	To Reinsurance Program from Tobacco Tax		$0	($11,523,552)	($11,536,694)	($11,551,467)
	Net Change in Dirigo Allocation		$35,649,622	$44,811,247	$24,272,863	$24,319,644