Sec. 1. 22 MRSA §254, sub-§2, as amended by PL 1983, c. 290, is repealed and the following enacted in its place:

2.__Individuals eligible for participation.__An individual is eligible under this program if the household income, as defined in Title 36, section 6201, subsection 7, is less than or equal to 185% of the nonfarm income official poverty line.__The nonfarm income official poverty line is that applicable to a household of the size involved, as defined by the federal Office of Management and Budget and revised annually in accordance with the United States Omnibus Budget Reconciliation Act of 1981, Section 673, Subsection 2.__Individuals are also eligible for this program if the household spends at least 40% of its income on unreimbursed direct medical expenses for prescription drugs and the household income is not more than 25% higher than the levels specified in this subsection.__For the purposes of this section, the cost of drugs provided to a household under this section is considered a cost spent by the household for eligibility determination purposes;

Sec. 2. 24-A MRSA §4255 is enacted to read:

§4255.__Gross direct premium tax

All health maintenance organizations except those organized as nonprofit entities shall pay a tax on all gross direct premiums written on persons residing in the State in accordance with the provisions of Title 36, chapter 357.

Sec. 3. 36 MRSA §2513-C is enacted to read:

§2513-C.__Gross direct premium tax payable by certain health

maintenance organizations

All health maintenance organizations except those organized as nonprofit entities shall pay a tax on all gross direct premiums written on persons residing in the State at the rate of 2% a year.

Sec. 4. 36 MRSA §2515, as amended by PL 1997, c. 435, §3, is further amended to read:

§2515. Amount of tax

In determining the amount of tax due under section 2513 or, 2513-B or 2513-C, each company or health maintenance organization shall deduct from the full amount of gross direct premiums the amount of all direct return premiums on the gross direct premiums