The Dirigo Health board of directors decided Monday to put on hold, for now, the second year of the controversial assessment to pay for the state’s subsidized health care program known as DirigoChoice until after the November election.

The delay will give Gov. John Baldacci’s blue ribbon commission on Dirigo a “blank slate” when recommending how the program should be funded going forward, said Trish Riley, head of the governor’s Office of Health Policy and Finance. The commission – meeting for the first time this week – is scheduled to make its recommendations in December.

News of the assessment freeze for 2007 came on the same day the Superior Court announced its decision to uphold the $43.7 million assessment for 2006, which already is being collected.

The assessment, which is charged to private health insurance carriers and the self insured and passed onto consumers, was appealed by a consortium of insurance companies and the Maine State Chamber of Commerce, who say it makes regular health insurance more expensive.

On Monday, their representatives said they would be encouraged about the decision to put the 2007 assessment – recently calculated at $34.3 million – on hold, if it was truly going away.

“They haven’t decided not to assess it, they’ve only delayed it,” said Kristine Ossenfort of the chamber. “We didn’t get rid of the savings offset payment.”

The savings offset payment is the name given to the assessment because it is supposed to represent savings in the system as a result of the legislation that created Dirigo Health insurance and other cost-saving initiatives. Those savings include voluntary caps on spending by the state’s hospitals, less bad debt and charity care as a result of more people being insured and reduced interest costs to hospitals because some outstanding Medicaid bills are being paid by the state.

The Superior Court ruled the Dirigo Health agency was acting within statutory bounds to calculate the savings the way it did and that the assessment did not constitute a tax, which can only be levied by the Legislature.

“Savings offset payments are the means by which the Legislature redistributes savings in the health care system in order to make health insurance available to a greater percentage of Maine citizens,” the court ruled, adding they were “not a tax.”

The assessment is used to subsidize DirigoChoice, which is an Anthem-based plan, sold by Anthem in partnership with the state.

Those enrolled in the program, whose incomes are below 300 percent of the federal poverty guideline – defined as $29,000 annually for a single adult or $58,000 for a family of four – get part of their premium and deductible subsidized by the state based on their income. The subsidies range from 20 to 80 percent of the cost.

The governor promised at the start of his first term to create a program that would cover the state’s 130,000 uninsured in five years, but enrollment has not lived up to that expectation.

As of July, the program had 10,722 people enrolled in it after a year and a half in operation. The administration also counts another 5,100 parents enrolled in traditional Medicaid because the same legislation that created DirigoChoice also authorized an expansion of Medicaid in Maine to include parents of children already in the federally subsidized program.

While polls show the public supports affordable health insurance, the assessment has become a political liability for the governor.

When efforts to cut the assessment failed in the Legislature earlier this year, Baldacci announced his plan to create a commission to come up with alternative funding methods.

Riley said the Muskie School has done a report for the commission outlining what other states are doing to support their subsidized insurance programs. She said most states use a variety of methods in combination.

Asked about the timing of putting the savings offset payment on hold the same day the court announced its decision to uphold it as a funding mechanism, Riley said she had no control over when the court makes its decisions.

“This is a sincere effort to send the message we intend to put the savings offset payment aside and move onto alternative financing,” Riley said.

Those who sued over the savings offset payment say an appeal of the courts ruling is still possible as is a fresh suit over the 2007 assessment, which was just determined by the superintendent of insurance last month.

“We’re considering our option to appeal,” said Katherine Pelletreau, director of the Maine Association of Health Plans, which was one of the parties in the suit.

Pelletreau said insurance companies need to know soon if the savings offset payment is going to be used in 2007 because rate notices need to go out to customers 60 days before a rate changes goes into effect, or somewhere around the first of November.

Questions also were raised about whether a new funding mechanism could be put in place fast enough to keep the program going in 2007, since it would have to be approved by the Legislature.

Robert McAfee, chairman of the Dirigo board, said enrollment could be restricted in the program by the agency until a funding mechanism is in place.