While a divided committee wrangles over how much can justifiably be charged to private health care consumers to support the continuation of the Dirigo Health subsidized insurance program, one thing appears certain – your premiums will be going up.

Just how much will be determined later this month when the Dirigo Health board of directors considers two recommendations from its so-called working group on how much private insurance companies and the self-insured should be assessed in 2006 to help pay for the state subsidized insurance program known as DirigoChoice.

Under recently amended law, the assessments can be up to 4 percent of paid claims or about $50 to $55 million a year on a paid claims base of close to $1.3 billion. Dirigo needs about $40 to $45 million in the next calendar year to keep going, based on enrollment projections that are not firm.

The original law would have allowed an assessment of up to 4 percent of paid premiums, a much higher number.

The assessments are supposed to be determined by how much is being saved in health care costs statewide because of initiatives outlined in the legislation that created DirigoChoice.

Those initiatives largely revolve around voluntary profit and expense caps at the state’s hospitals. They also include a reduction in bad debt and charity care that result from more people being insured either by DirigoChoice or under an expansion of the state’s Medicaid program that went into effect earlier this year.

But as Sharon Roberts, director of stakeholder relations for Anthem and a member of the working group, pointed out, “savings in this context is really cost avoided.”

“Savings is really a reduction of what otherwise would have been an increase in costs,” Roberts said, “costs that would have gone up more without Dirigo initiatives.”

She gave as an example a rate that might have gone up 8 percent, but now will go up only 4 percent.

The assessment will be passed onto consumers through the premium, she said, but if the costs of procedures covered by Anthem go down because of Dirigo, the premium rate hike won’t be as bad as it otherwise would have been. Anthem is the largest health insurance company in Maine and also is selling and administering DirigoChoice in partnership with the state.

The biggest fear of the business community is that the charge of the procedures won’t go down, but the assessment will be added to the premium anyway.

The purpose of the assessment – officially known as the savings offset payment but called a tax by many – is to pay for DirigoChoice insurance and a health quality program the state has started.

Trish Riley, the head of the governor’s office of Health Policy and Finance, said while the amount needed to keep Dirigo going in 2006 is close to the maximum amount the legislation allows the state to raise, her group is not trying to force the numbers to work.

“People say we’re trying to create savings to that number, which isn’t the case,” Riley said.

Members of the working group opposed to the state’s proposed methodology to calculate the assessment say it would be too cynical to say the numbers are being made to add up.

“I think there are a lot of people out there that have that concern. I hope that’s not the case,” said Kristine Ossenfort, who represents the Maine State Chamber of Commerce in the group. From her point of view, she said, people on both sides are “making a good faith effort” to come up with real numbers.

“I think they are trying to come up with a real number,” Roberts agreed. “They have acknowledged that the savings may or may not be what they would otherwise like them to be at the end of the day.”

The two factions on the committee – those aligned with the Dirigo Health agency and those representing insurance companies, hospitals and businesses – have each submitted recommendations to the Dirigo board of directors on how to calculate the assessment fees. Ultimately it will be up to Bureau of Insurance Superintendent Alessandro A. Iuppa to make a decision based on the board’s recommendation. A public hearing has been scheduled for Oct. 27.

Where the two sides differ is what should be included in the calculation.

Dirigo Health agency advocates want to look at savings made by hospitals adhering to voluntary caps on profit and expense growth. In the legislation passed in 2003 that created Dirigo Health and its insurance program, hospitals were asked to limit profit growth to 3 percent and cost increases to 3.5 percent.

Only those hospitals that actually capped their profits and expenses will be included in the formula, Riley said, because they were voluntary measures.

“If people are not confidant that these voluntary approaches produced savings… we have an obligation to figure out what will work,” Riley said, including revisiting mandatory caps.

Ossenfort said the business side of the table wants the state to look at costs at all the hospitals, taking what was saved by some and subtracting expenses that went up in others.

“It’s imperative you look at all hospitals,” Ossenfort said, or you’ll only get part of the picture.

The state also wants to take into account the reduction in bad debt and charity care in the state’s hospitals based on the number of uninsured and under-insured Mainers now covered under DirigoChoice or Medicaid. Another part of the calculation will look at savings generated under a mandated slowdown of new construction at hospitals.

“We’re concerned there may be some double counting,” Ossenfort said, for example that bad debt and charity care savings would already be reflected in other parts of the state’s formula.

The business side has proposed instead a cost per patient measurement they say would reflect everything the state is trying to measure separately.

And, if that doesn’t work, they want to reduce by as much as 50 percent the ultimate number the state comes up with because “it’s extremely difficult if not impossible” to trace those savings back to Dirigo Health initiatives, Ossenfort said.

“You can’t assume that 100 percent of those savings are attributable to Dirigo.”

One example is the state’s proposal to count the more than $200 million the state is now paying hospitals in overdue Medicaid bills as savings even though hospitals had to sue the state to get part of it.

“Our perspective is that’s not a Dirigo initiative,” Ossenfort said. “It’s like paying your credit card 10 days late instead of 20 days. You’re saving money, but your credit card company isn’t.”

Roberts of Anthem said, “There has to be a way to use measurements …understandable to John Q. Public, who is purchasing health insurance. They ought to be able to read about a measurement that is understandable to them and a direct line of sight from the Dirigo initiatives.”

“If the savings are there, no one more than us wants to make sure our health premiums are not going up more than they have to,” she said.