As Health Plan Falters, Maine Explores Changes

PORTLAND, Me., April 23 - When Maine became the first state in years to enact a law intended to provide universal health care, one of its goals was to cover the estimated 130,000 residents who had no insurance by 2009, starting with 31,000 of them by the end of 2005, the program's first year.

Skip to next paragraph Herb Swanson for The New York Times

Jacquie Murphy of Westbrook said the health care overhaul had helped her obtain a walker and affordable care. "It absolutely saved my life," she said.

So far, it has not come close to that goal. Only 18,800 people have signed up for the state's coverage and many of them already had insurance.

"I think when we first started, in terms of making estimates, we really were kind of groping in the dark," said Gov. John E. Baldacci, who this month proposed a host of adjustments.

The story of Maine's health program - which tries to control hospital costs, improve the quality of health care and offer subsidized insurance to low-income people - harbors lessons for the country, as covering the uninsured takes center stage. States, including California, Massachusetts and Pennsylvania, have unveiled programs of their own, seeking to balance the needs and interests of individuals, employers, insurers and health care providers.

But as Maine tries to reform its reforms, it faces some particular challenges: It has large rural, poor and elderly populations with significant health needs. It has many mom-and-pop businesses and part-time or seasonal workers, and few employers large enough to voluntarily offer employees insurance. And most insurers here no longer find it profitable to sell individual coverage, leaving one carrier, Anthem Blue Cross Blue Shield, with a majority of the market, a landscape that some economists said could make it harder to provide broad choices and competitive prices.

Some parts of the state's current program - named Dirigo after the state motto, which means "I lead" in Latin - are seen as promising. These include the creation of a state watchdog group to promote better health care, and an effort to control costs by asking hospitals to rein in price increases and spending, although experts and advocates said those cuts needed to be greater.

But a financing formula dependent on sizable payments from private insurers has angered businesses and is being challenged in court.

And while some people have benefited from the subsidized insurance, which provides unusually comprehensive coverage, others have found it too expensive. And premiums have increased, not become more affordable, because some of those who signed up needed significant medical care, and there are not enough enrollees, especially healthy people unlikely to use many benefits.

"It was broad-based reform that just never got off the ground," said Laura Tobler, a health policy analyst with the National Conference of State Legislatures. "The way that they funded the program became controversial. And getting insurance was voluntary and it wasn't that cheap."

Governor Baldacci said in an interview that when the Legislature enacted the Dirigo Health Reform Act in 2003, it gave him less money and more compromises than he had wanted. He said his administration had now learned more about what works and what does not.

His new proposals include requiring people to have insurance and employers to offer it and penalizing them financially if they do not; making the subsidized insurance plan, DirigoChoice, more affordable for small businesses; creating a separate insurance pool for high-risk patients; instituting more Medicaid cost controls; and having the state administer DirigoChoice, which is now sold by Anthem Blue Cross.

"We've got a reform package that takes Dirigo to the next level," Mr. Baldacci said. "It takes the training wheels off."

The proposed overhaul seems to include something each of Maine's constituencies can embrace and something each opposes, so there is no guarantee which changes will be adopted by the Legislature.

"It's very hard politically to deal with the underlying costs of the system," said Andrew Coburn, director of the Institute for Health Policy at the Muskie School of Public Service in Portland. "And Maine is just not wealthy enough to cobble together enough resources to fully cover the uninsured."

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