Self-employed South Portland resident Jean-Claude Poulin says Dirigo Health was his only option for an affordable health insurance policy with a reasonable deductible.

But, funding Dirigo with a beverage tax upsets some people, like Kim Jaques, manager of Charlie Beiggs Restaurant in Windham, who said the restaurant industry is already strapped by a tough economy.

Those arguments are at the heart of efforts to repeal the beverage tax passed by the Legislature in April to partially fund Dirigo Health.

After the tax passed, a coalition of business owners and representatives of the beverage industry called Fed Up With Taxes formed to repeal the bill. The group collected enough signatures to bring a veto referendum to the November ballot.

Opponents of the veto say it makes sense to tax products that increase health costs for Mainers and the Dirigo Health program is necessary and effective.

Dirigo Health is currently funded by a system called Savings Offset Payment, which opponents to the veto say is unstable. Through a complex formula, insurance regulators look at what health-care costs would be if Dirigo Health reforms, including voluntary caps on hospital profits, had not been enacted, and then compare Maine’s experience to national trends to determine the so-called savings.

The Savings Offset Payment methodology has been difficult for the public to grasp and is controversial because insurance carriers and self-insured businesses can pass it onto consumers, raising premiums.

If the beverage tax is repealed, Dirigo Health would continue to be funded by these payments.

The program currently insures 18,000 individuals, which includes a 5,000-person expansion of MaineCare, Maine’s Medicaid program, according to Cherilee Budrick, communications coordinator for Consumers for Affordable Health Care. Premiums are subsidized based on income.

Founded in 2003, Dirigo was intended to insure 160,000 people, according to Dr. Gordon Smith, lawyer and the executive vice president of the Maine Medical Association.

Dirigo Health has been struggling financially, with nearly $20 million borrowed from the state’s general fund between November 2007 and July 2008. Gov. John Baldacci closed enrollment in the plan last year when it was believed the program would run out of money in February 2009 if a new funding source wasn’t identified.

Skip Moskey of Limerick, who started his own marketing and public relations consulting firm more than two years ago, said the only health insurance he could realistically buy for himself was from Dirigo.

“It’s the only one I can afford,” said Moskey, 58.

With a small discount, Moskey pays $508 a month, compared to $1,000 to $1,800 a month he would have paid for an individual policy with a major insurance company.

“The availability of affordable health insurance for small businesses is a driver of the Maine economy,” said Moskey, who has worked as a health policy analyst.

Poulin is a cosmetologist and photographer. He enrolled in Dirigo in August 2007 replacing a plan with a $15,000 deductible that did little to help him treat his atrial fibrillation, an abnormal heart rhythm.

Poulin pays $410 a month now for a policy with a $500 deductible, which he said is not cheap, but at least has a reasonable deductible.

“It allows people like me to care for myself,” Poulin said. “We’re not asking for a handout, just oversight and reasonable prices.”

Some restaurant and store managers said the taxes would be too costly. With no plans to raise prices, Jaques said, owners of Charlie Beiggs would have to absorb the extra cost and wouldn’t be able to offer free refills.

“I think there’s got to be another way to do this without impacting the restaurants and the consumers,” Jaques said, adding that a slow economy and increased costs to buy and transport ingredients have already hurt the industry.

The owner of Plummer’s Supermarket in Buxton, Troy Plummer, also opposes the tax.

“I think the state of Maine pays enough,” he said. “Once we start something like this, I don’t know where it ends.”

Chris Sanborn, the manager of Plummer’s, said a third of what the business sells are beverages that would be affected by the tax.

Private health insurance is offered to 40-50 employees of Plummer’s five family businesses in Buxton, Waterboro and Limerick. After reviewing different plans, bookkeeper Joanne Plummer said Dirigo was not the best deal.

If the veto fails, new taxes would come to 1 cent on a glass of wine, 3 cents on a bottle of beer and 4 cents on a can of soda and other sugared drinks. Maine breweries would be exempt, as would milk, coffee and beverages containing more than 10 percent fruit or vegetable juice.

An analysis by representatives of Fed Up With Taxes estimated that as a result of the bill, $40.7 million would be raised in additional beverage taxes per year. Health Coverage for Maine representatives estimated that $16.7 million would be raised per year.

Fed Up With Taxes has been largely funded by out-of-state beverage companies. Since July 1, the coalition received more than $1.6 million in contributions from companies including Anheuser-Busch, Coca Cola, Dr. Pepper Snapple Group and Pepsi Cola, according to the Maine Commission on Governmental Ethics and Election Practices.

Health Coverage for Maine, the group working in opposition to the veto, collected less than $43,000 during the same time period.

Skip Moskey of Limerick, who started his own marketing and public relations consulting firm more than two years ago, says the only health insurance he can realistically afford is Dirigo.