On a sparkling clear morning in Maine this past summer, John Baldacci and Murphy Brown took a stroll stride by stride, just like countless masters and their dogs do every day.
On this particular day, however, Baldacci, the Democratic governor of Maine and a dog lover, was preparing to sign into law historic legislation that would provide healthcare coverage to thousands of uninsured Maine residents.
Murphy, a 10-year-old brown and white springer spaniel, seemed to want her share of the spotlight as the governor signed the legislation during a ceremony in the back yard of the executive mansion in Augusta. Murphy scooted around under the cloth-draped table before poking her head out at the governor as more than 100 supporters and the media looked on.
The moment could not have been more symbolic for the 48-year-old governor, who took in Murphy from his mother, Rosemary, after her death last year.
Rosemary Baldacci, who was proprietor of Momma Baldacci's Italian restaurant in Bangor, encouraged her son to do something for the uninsured, which led him to craft legislation that would create Dirigo Health, a quasi-public state insurance program designed to provide coverage for a large portion of the state's uninsured, estimated to be as many as 180,000 people.
"The signing of Dirigo was very near and dear to his mother," says Lee Umphrey, the governor's spokesman who was in attendance that day. "During these special events, Murphy will come out. She reminded the governor of the promise he made to his mother."
Dirigo-the state's motto, Latin for "to lead"-is expected to insure 31,000 people during its first year beginning in July 2004. By 2009, with fees from enrolled individuals and small businesses and federal matching funds for low-income people, the program is projected to insure another 110,000 throughout the state.
State Rep. Christopher O'Neil, a Democrat, introduced the legislation on behalf of Baldacci, who authored the plan and saw it pass the state Senate 25-8 and the state House 105-38 with bipartisan support after initial debate was split roughly along party lines, with strong Democratic support and Republican opposition.
Under the final bill, the state will retroactively charge each insurance company an annual fee based on savings from cost-containment measures. The state will use the revenue from those fees to subsidize health coverage-based on a sliding scale -for residents not eligible for Medicaid but living below 300% of the federal poverty level. The fee to insurance carriers, set to kick in during 2004, would either be 4.1% of annual premium revenue or the savings each organization realizes, whichever is less. Individual payments and other revenue sources will help fund the program.
Baldacci's plan met with opposition from the hospital industry, unions and legislators, but with extensive negotiations, the governor was able to steer his plan to fruition.
In the bill's original form, the plan would have authorized state regulators to control hospital revenue and expenses, which moved the Maine Hospital Association to action. The association, which represents 38 hospitals, successfully lobbied to remove the rate-setting provisions and accepted provisions to voluntarily hold consolidated operating margins to 3% and annual cost increases to no more than 3.5%.
The landmark program has placed the healthcare spotlight on Baldacci, a former member of Congress who took office in January after capturing 48% of the statewide vote in a four-way race last year. He outlined his plan for Dirigo Health during his inaugural speech and in June signed into law the plan that lawmakers approved.
In a separate move, Baldacci abandoned plans for the Maine Rx prescription drug discount plan and saw his alternative plan, Maine Rx Plus, approved by the Legislature. The program will cost less-$2.8 million in the next two years combined, compared with $4.5 million annually for Maine Rx-and provide coverage for fewer residents-275,000 compared with 325,000.
Discounts on the prescription drugs covered by the state program will range from 15% to 60%, depending on income, and would be funded in full by the state until Maine is able to negotiate rebates with drugmakers. Like Maine Rx, which was argued all the way to the U.S. Supreme Court where justices lifted an injunction in May, Baldacci's Maine Rx Plus also has met legal challenges by pharmaceutical companies and is being challenged before the Maine State Supreme Court, Umphrey says.
No stranger to public office
Baldacci is a lifelong Mainer who has held public office since age 23 when he won a seat on the Bangor City Council in 1978. He continued to work in the family restaurant, helping him to learn issues important to business owners in the state.
Baldacci and his seven siblings caught the political bug early as they watched their father, who owned the Italian restaurant, embrace public service as a state delegate for presidential candidate John Kennedy in 1960. At the age of 12, Baldacci also participated in a youth task force his father led, learning valuable lessons about service.
"The most important thing is to be honest, be yourself and work hard," Baldacci says. "That gets you through a whole lot of difficulties. My mom and dad raised eight children and taught us to serve the community."
By 1982, Baldacci won a seat in the state Senate where he served until 1994. Baldacci, who earned a degree in history at the University of Maine in 1986, had his sights on a higher office and was elected to Congress in 1994, representing Maine's 2nd District, the largest congressional district in physical size east of the Mississippi River.
It was during days of campaigning for the House and crisscrossing the district that Baldacci brought his family business on the road, serving $2 spaghetti dinners in little towns while he listened to his constituents and their concerns. Rep. Tom Allen (D-Maine), who represents the state's 1st District, called the spaghetti dinners Baldacci's "signature political event."
Baldacci, whose brother Paul still operates the restaurant, made a name for himself through the spaghetti dinners in a state that is accustomed to politicians throwing bean suppers. "I'm in the Italian restaurant business," Gov. Baldacci says. "I can't put on a bean supper. We don't even have beans."
Aside from spreading his expertise in preparing pasta, Baldacci used the political dinners to focus on economic development issues, such as expanding trade opportunities for businesses in the state, increasing federal funding for research and development, and securing more funding for Maine's transportation network.
Troubles in healthcare
By the time Baldacci decided to run for governor, an unsettling theme among business leaders had emerged. They were in search of affordable, quality healthcare at a time when the local economy was stagnant and insurance premiums were increasing by 20% to 30% annually. Employers were concerned that higher premiums would lead to an exodus of workers, "leaving Maine a graying state," the governor recalls.
"When you talked to business leaders, the issue they brought up the most was health insurance," Baldacci says.
With his family's experience as small-business owners, the issue hit home for the governor.
"In Maine, small businesses are dying out there," Allen says. "You can't talk to (small-business owners) without them asking about healthcare. It's an absolutely huge political issue."
During his campaign for governor, Baldacci pledged affordable healthcare for Maine residents. In his inauguration speech, the governor announced he was establishing an office of healthcare policy and finance to develop the Dirigo plan.
"The most important thing was a recognition that we are in this together," Baldacci says. "I wanted to have a real solution. I didn't want a sound bite for a political campaign."
To lead his new office, the governor appointed Trish Riley, who took a sabbatical as executive director of the National Academy for State Health Policy, a Portland-based not-for-profit organization that works with states on health policies and practices.
Riley, who knows Baldacci from their days of commuting from Washington, knew passing the legislation would be a battle with the hospital industry, but she saw Baldacci as a tenacious leader who would not give up.
"He was adamant this was going to happen," Riley says. "I have studied health reform, and the missing element is political will. He wanted the bill passed early in his (tenure) so we had 31/2 years to implement it."
Riley says the governor's "shrewd political instincts" were behind the compromises that led to the plan's eventual passage. "Through all the screaming, he can see where the target is. We negotiated with everybody for days and weeks."
Baldacci embraced the debate with the hospital association, saying it was "important to maintain a constructive relationship." Baldacci says he crafted a balance between providing for the uninsured and the hospital leaders, who believe maintaining the 3.5% limit on expense growth would be difficult, especially those who have labor contracts requiring a certain rate of wage increases.
"We want them to be successful," Baldacci says. "We need to do this to expand access. They were willing to sit down. As long as everyone gives 100%, we'll come up with the best outcomes."
Steven Michaud, president and chief executive officer of the Maine Hospital Association, called his negotiations with the governor a "bruising battle." He was "a formidable force," Michaud says. "He relished the fight. To his credit, he knew compromise was needed."
The success of the Dirigo plan will depend on its implementation, Michaud says. Also, Baldacci must not overpromise to the people and advertise it as a universal coverage plan, he says.
"He needs to be sure his healthcare politics are moderate and not from the extreme left," Michaud says. "That is going to be something he needs to watch. My concern is that he is led on the healthcare side with people who have an extremist agenda."
For Baldacci, the battle to pass the legislation is over and now the real work begins. The governor has established an independent board of directors to oversee Dirigo, which would be subject to review by the Legislature. In September, he also nominated 11 members to an advisory council on healthcare systems development to help establish policy guidelines for the plan.
Baldacci knows Dirigo could go down as his legacy as governor, but the state's chief executive would rather focus on the potential impact it could have on thousands of residents.
"My sense, as in any effort, is that I am not going to take credit," he says. "We are all on the same level. I am just looking forward to Dirigo shining proudly and brightly."
Birthplace: Bangor, Maine
Family: Wife, Karen; son, Jack, 12
Education: Bachelor's degree in history, University of Maine,
Previous jobs: Manager at Momma Baldacci's Italian restaurant, Bangor; city councilman, Bangor, 1978-1982; Maine state senator, 1982-1994; U.S. representative, Maine's 2nd District, 1994-2002
Quote: "The lack of affordable, accessible, quality healthcare in Maine is not just a crisis for the well-being of our citizens. It's an urgent problem for the economic development of our state."
--Excerpt from Baldacci's speech unveiling the Dirigo Health plan