AUGUSTA (AP) – A new bill headed for committee review is a long-in-development effort by Dirigo Health supporters to bolster the state’s troubled health insurance program and advance access to medical care for needy Mainers.

Proposing changes to the funding mechanism for the program, House Majority Leader Hannah Pingree’s measure would repeal a controversial savings offset payment that targets insurers and replace it with a health access surcharge of 1.8 percent on paid claims.

As widely expected, the bill also would increase the tax on cigarettes from $2 to $2.50 a pack and adjust levies on other tobacco products.

Additionally, the bill would establish a reinsurance association for the individual health insurance market without placing individuals in a separate risk association.

Under its provisions, individual premium rates charged by a carrier during a rating period could not exceed 2.5 times the lowest individual rate charged by the carrier.

The state superintendent of insurance, meanwhile, would be authorized to approve a pilot project to let health insurance carriers offer individual health insurance products for young people under the age of 30.

Dirigo was created in 2003 as a step toward universal health care, but has drawn criticism for falling below enrollment expectations.

Last October, Harvard Pilgrim Health Care of Massachusetts signed a contract to administer Maine’s Dirigo Health program.

Harvard Pilgrim succeeds Anthem Blue Cross and Blue Shield administering the state-subsidized DirigoChoice insurance product in Maine. Anthem and the state could not agree on terms to extend Anthem’s contract to administer the program beyond this year.

Last month, Gov. John Baldacci’s nominee for the open post of Maine insurance superintendent won Senate confirmation Thursday in a party-line vote.

Following an 8-5 vote by the Insurance and Financial Services Committee, the nomination of Mila Kofman was approved in the Senate on a tally of 18-17. It would have taken a two-thirds majority in the Senate to reverse the committee’s majority recommendation.

Questioning in committee and debate over the nomination on the Senate floor frequently focused on the state’s financially strapped Dirigo Health program. The program’s aim of expanding access to health care for people without insurance continues has pitted supportive Democrats against critical Republicans.

A key source of funds for the program’s subsidies, assessments to insurers based on savings created by Dirigo, has also been challenged by insurers.

AP-ES-03-04-08 1751EST