The state’s superintendent of insurance has approved a Dirigo fee of $34.3 million for 2007 – $7.5 million less than was requested, but enough to keep the subsidized insurance program going until the Legislature votes on a new way of funding it.

Trish Riley, head of the governor’s office of Health Policy and Finance, said the $34 million was “something to work with” as a blue ribbon commission created by Gov. John Baldacci considers other funding methods that ultimately would have to be approved by the Legislature next year.

The money would be in addition to the $43.7 million currently being charged to keep the program going through 2006 and would be collected in the same way – through an assessment on private insurance companies and self-insured business that is being passed onto consumers.

Baldacci, in a prepared statement, said the superintendent’s decision shows the legislation that created Dirigo Health insurance is saving Mainers money.

“This independent assessment by the Bureau of Insurance attests that Dirigo Health is working,” Baldacci said. “In two years, Dirigo has saved the health care system more than $78 million.”

Opponents of the assessment, including the Maine State Chamber of Commerce and an association made up of Anthem and other insurance companies in the state, disagree. They have filed suit to overturn this year’s nearly $44 million fee and could appeal the recently approved $34 million one to Superior Court.

As the so-called “payers” of the fee, they argue it taxes people who buy private insurance and actually increases the cost of health insurance for their customers and employees.

Kristine Ossenfort of the Maine State Chamber said her group was still in the process of reviewing the superintendent decision and considering the possibility of an appeal.

“We continue to be very concerned about the impact of the savings offset payment on health insurance costs. If the Dirigo savings are not real and do not accrue to payers, then the SOP will only increase health insurance costs, making health insurance less affordable for Maine businesses and their employees, who are already struggling to bear those costs today,” she said.

The assessment is supposed to recoup savings to the health care system that have come about as a result of Dirigo Health legislation, including voluntary caps on hospital charges and reduced bad debt and charity care as more people become insured.

The most visible product of that legislation is an insurance plan called DirigoChoice, which is an Anthem policy for small businesses and individuals, that is subsidized by the state based on a person’s income. It was started with $53 million in federal money in 2005.

Insurance Superintendent Alessandro Iuppa agreed with the Dirigo Health board of directors that money had been saved as a result of reduced hospital charges, but would not allow additional savings to be counted because of a cap on health-care related capital projects. Those, he said, would already be reflected in the lower patient charges.

He also approved savings from reduced bad debt and charity care and lower interest payments for hospitals, as a result of more timely payment of Medicaid bills by the state. In total, Iuppa approved $34.3 million in savings versus the $41.8 million requested by the Dirigo Health board. The superintendent said he would not rule on alleged improprieties in the board’s hearing process, including questions about a conflict of interest for one board member, saying those were not in his purview.

Riley said the assessment, while less than the current year’s, was enough to keep the program going while legislators review the work of a special Dirigo Health commission, appointed this month by the governor and scheduled to deliver its final report in mid-December.

She also said the Dirigo Health agency was in negotiation with Anthem to come up with a lower-cost product.

Dirigo insurance, which was passed with bipartisan support at the start of Baldacci’s first term in office, has become a key re-election issue because it represents the governor’s attempt at insuring the state’s 130,000 uninsured and bringing down health care costs for everybody.

Enrollment goals of 30,000 people in the first year, and 30,000 more every year until there were no uninsured left in the state, have fallen dramatically short. Fewer than 8,000 people were enrolled in DirigoChoice at the end of 2005, and the number now is just over 10,000.

The administration has stared counting new Medicaid participants to help boost its numbers, even though they are not enrolled in the DirigoChoice plan.

Baldacci has defended counting Medicaid enrollees, saying the legislation that created DirigoChoice also allowed an expansion of Medicaid to cover parents whose children already were eligible for the government program.