The coalition, Fed Up With Taxes, is made up of a dozen business trade groups and is leading a drive to put a proposal on the November ballot to repeal the taxes that state legislators approved in April.

The taxes are to replace a controversial assessment on health insurers that hasn’t come close to providing the revenue needed to fund DirigoChoice, the state-subsidized program offered to small employers and individuals.

The coalition will need to obtain the signatures of just more than 55,000 registered Maine voters by July 17 to put the question on the ballot.

The taxes include a first-ever Maine tax on soft drinks, a doubling of existing levies on beer and wine, and a 1.8 percent tax on health care claims paid by insurers and third-party claims administrators. The taxes are so unpopular that coalition members say they are optimistic they will get the signatures needed to get the repeal initiative on the ballot.

“It is a significant undertaking, but we believe we have a fighting chance,” said Newell Auger, director of the coalition and head of the Maine Beverage Association in Portland. “This isn’t about health care. It is about new taxes. This is about a nonpartisan group that is fed up with taxes.”

State officials say the new taxes will produce roughly double the revenue as the previous assessment on insurers, while the amount collected will be more predictable. The previous assessment had been linked to savings achieved by insurers, with the thinking that providers would shift less uncompensated health care costs to insured patients as more people had coverage.

The assessments were “contentious and very costly to calculate,” said Trish Riley, director of Maine Gov. John Baldacci’s Office of Health Policy and Finance.

Objections have been raised, and “we have tried to meet them,” Riley said.

The battle comes nearly five years after Maine legislators passed what then was considered a pioneering approach to drastically reduce the state’s then-190,000 uninsured. But the program’s achievements have been modest at best and critics have blasted the plan.

“It has been a colossal, expensive failure,” with the program providing coverage to only a small percentage of the previously uninsured, said Tarren Bragdon, CEO of the Maine Heritage Policy Center in Portland.

While once hailed as a model, now “no state is looking to replicate this failed example,” Bragdon said.

“It is costing $50 million a year to provide coverage to a very small number of people,” said Chris Hall, senior vice president for the Portland Regional Chamber. “The costs clearly are outweighing the benefits.”

Just less than 13,000 people now have coverage through DirigoChoice—about 1 percent of the state’s population and a fraction of initial state enrollment predictions.

“The program has made only a small dent in reducing the number of uninsured,” said Randy Abbott, a senior consultant with Watson Wyatt Worldwide in Wellesley Hills, Massachusetts.

Riley acknowledged that DirigoChoice, which began issuing policies in January 2005 and currently offers coverage by managed care provider Harvard Pilgrim Health Care, is “a work in progress.” But he also said it has enabled about 28,000 Maine residents to obtain health insurance coverage since its inception.

Still, observers say the program’s basic premise hasn’t come close to being realized: that the savings resulting from moving the state closer to universal coverage would be sufficient to fund an expansion of coverage.

In part, observers blame the low enrollment in DirigoChoice on the fact that it hasn’t, in many cases, made health care coverage more affordable.

“Coverage is still expensive,” said Dave Spellman, president of Pratt Financial Group, an insurance agency in Westbrook, Maine. In fact, small employers in some cases may pay more for coverage through DirigoChoice compared with the traditional market, he said.

That can occur, for example, because DirigoChoice requires employers to pay 60 percent of the premium. How much DirigoChoice pays of the remaining premium depends on an employee’s income. If an employer had paid only 50 percent of premiums, its cost could increase by obtaining coverage through DirigoChoice, Spellman said.

Others say state demographics have a lot to do with the continuing high number of people without health insurance.

“This is a state with a lot of small employers with many low-wage employees who can’t even afford subsidized health insurance coverage,” Abbott said.

Filed by Jerry Geisel of Business Insurance, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.