AUGUSTA (AP) – Democratic lawmakers, moving swiftly through a long legislative day, mustered votes of final approval in the House and Senate late Tuesday night for a bill to broaden beer and wine taxes as part of a change in the funding mechanism for Maine’s Dirigo Health program.

Enactment tallies for the measure, which has the support of Gov. John Baldacci and which would allow for limited new enrollment in the subsidized health insurance program, were 75-64 in the House and 18-17 in the Senate.

The amended bill that passed departed in a significant way from its original version.

Initially, a key feature called for a 50-cent per pack increase in the cigarette tax. But Tuesday in the Democrat-dominated House, that idea was discarded in favor of increased taxes – a little more than double – on beer and wine made by large producers. The new package also would impose new wholesale taxes on soda and syrup used to make it.

“These assessments and taxes can bring Dirigo to the point where it can continue to function,” said Rep. John Brautigam, D-Falmouth, the House chairman of the Insurance and Financial Services Committee.

A first vote approved the new funding scheme narrowly, 72-69. A stronger second vote, 76-68, sent the measure on to the Senate for consideration there, where the Democratic majority holds a mere 18-17 edge over Republicans.

The Senate made changes of its own, scrubbing some remaining tobacco-related tax hikes from the measure as it advanced in party-line voting.

The final votes of approval in both chambers came shortly before midnight.

The Dirigo Health program was created in 2003 as a step toward universal health care, but has drawn criticism for falling behind enrollment expectations. Its reliance on a savings offset payment that targets insurers has sparked regulatory battles and court fights.

The new bill, sponsored by Democratic House leader Hannah Pingree of North Haven, will replace the savings offset payment with a 1.8 percent surcharge on paid claims.

Pingree’s office sought to highlight “market reforms” contained in the bill, citing a pilot insurance program for young people and adjustments in community rating bands aiming to reduce costs for young, healthy people without raising costs for those older and less healthy.

The bill also seeks to create a reinsurance program through which Dirigo would pay for major claims.

“These market reforms will contribute to lower private insurance rates for Maine consumers by up to 40 percent, especially by drawing in young people, who are largely uninsured,” Pingree said in a statement, “and they will encourage more competition in the health care market – which results in even lower rates for everyone.”

There have been Republican calls for a Dirigo shutdown from critics who argue that the subsidies it provides distort the free market, discriminate unfairly and are financially unsustainable.

Last month, Senate Minority Leader Carol Weston, R-Montville, one of many Republicans who criticize the Dirigo program as too costly and who favor a more purely market-oriented approach to making health insurance more affordable, said she thinks market reform should be decoupled from Dirigo funding.

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