AUGUSTA – Despite the inflammatory rhetoric and election-year politicking swirling around the state’s controversial DirigoChoice health insurance plan, Gov. John Baldacci said at a Wednesday media conference, the time is right to expand the health plan’s reach.

The governor will submit a proposal soon that, if passed by the Legislature, would transform the Dirigo Health Agency into a self-insured entity, allowing it to develop more affordable policies and provide health coverage to more Mainers who currently lack insurance.

“Now is not the time to move backward,” Baldacci told a gathering of supporters at the Maine Parent Federation, an Augusta nonprofit organization whose employees are among the roughly 10,000 Maine residents insured through DirigoChoice. “The stakes are too high to turn back.”

The governor said that by going with a self-insured system, the profit-making middleman is removed from the picture and resulting savings are used to pay for more coverage.

In his announcement, Baldacci cited other Maine employers who self-insure, such as L.L. Bean, Maine state employees and Cianbro construction company.

The Dirigo Health Agency is a legislatively created organization with both public and private functions.

Governed by an appointed board of directors, it is the administrative home of the DirigoChoice insurance product and the Maine Quality Forum, which seeks to improve the quality and efficiency of health care throughout the state.

The insurance is currently offered through Anthem Blue Cross and Blue Shield of Maine, but the contract between Anthem and the Dirigo Health Agency will expire at the end of this year.

If Baldacci’s proposal is enacted, the agency will be ready at that time to take over much of the work of administering DirigoChoice, including ramping up marketing, expanding the number of insurance agents who sell the product and developing a variety of more affordable options.

The agency would probably still contract with some outside company – perhaps even Anthem – to handle the paying of claims.

Critics of DirigoChoice have complained that the product, while providing comprehensive coverage, is too expensive for many people to afford, despite its income-based system of premium subsidies and variable out-of-pocket spending limits.

On Wednesday, Trish Riley, head of the Governor’s Office of Health Policy and Finance, said the governor’s plan would eliminate the profit motive that has contributed to higher costs under Anthem’s administration.

“Anthem is required to spend about 75 percent of premiums on paying medical claims,” she said. “The other 25 percent goes to marketing, administration and profit. That will now be money that [the Dirigo agency] will be able to use to make coverage available to more people.”

The DirigoChoice insurance plan has come under increasing scrutiny and fire in recent months from a number of sectors that originally supported its creation, including the insurance industry, hospitals, the Maine State Chamber of Commerce and a number of Republican lawmakers.

On Wednesday afternoon, Rep. Kevin Glynn, R-South Portland, explained that these groups are “quite frustrated” with the latest announcement, in part because “it’s just another expansion of big government.”

In order to garner widespread support for the original initiative, Glynn said, Dirigo designers billed the insurance plan as a market-based program that would partner with private industry to serve Maine’s uninsured.

“Now they’re cutting the private companies out, and the state is assuming the risk,” he said. “This is not the Dirigo we voted for.”

Glynn said consumers could lose protection under the change, since they likely would be unable to sue the state-run program for damages without the explicit permission of the Legislature.

And, he said, Maine health care providers should be wary of the proposal, since another state-administered program, MaineCare, has a choppy record of paying its bills on time.

Anthem spokesman Mark Ishkanian said the company was not surprised by the announcement by Baldacci, who hinted at it during his State of the State speech earlier this year.

Whatever the Legislature does with Baldacci’s plan, Anthem for now is focused on “making Dirigo as successful as possible,” said Ishkanian.

The spokesman said removing profits from the equation may not result in the expanded coverage Baldacci envisions because profits now are only “pennies on the dollar.”

Asked at the media event whether building on his 2003 Dirigo Health Reforms would be the centerpiece of his campaign for re-election, Baldacci acknowledged the importance of the health care issue to his administration.

“People want real solutions, and this is the reason I ran for office,” he said. “I didn’t do it just so I could hold office and look nice, but so I could improve the lives of Maine people.

“It’s easy to say [the health care problem] is too complicated, let someone else figure it out,” he said. “But no one else is figuring it out. Maine is really out in front on health care.”

The Associated Press contributed to this report.