AUGUSTA – Harvard Pilgrim Health Care of Massachusetts signed a contract Tuesday to administer Maine’s Dirigo Health program, which will continue coverage for 15,000 members of the state-subsidized program.

Coverage by the nonprofit Harvard Pilgrim starts Jan. 1, 2008, under the one-year, renewable contract, said Trish Riley, Gov. John Baldacci’s health policy director.

“Overnight it gave Harvard Pilgrim 20 percent more of the individual market,” said Riley. She said that’s an important step toward getting more people in that insurance market covered, a priority for the Dirigo program. Harvard Pilgrim also provides health insurance products for companies and families.

When the agreement between the state and Harvard Pilgrim was announced in September, Baldacci expressed optimism that the insurer’s added presence in the state would stimulate competition in the market and move the state closer to providing affordable insurance to those who lack coverage.

Harvard Pilgrim, which has slightly more than 1 million members in Maine, Massachusetts and New Hampshire, is committed to reaching farther into the northern New England market, said Bruce Bullen, Harvard Pilgrim’s chief operating officer, who attended Tuesday’s signing ceremony.

“We wanted to do something to increase our visibility in Maine. We saw this as a good opportunity to partner with the state and we really think we can make Dirigo a viable program,” said Bullen.

Harvard Pilgrim succeeds Anthem Blue Cross and Blue Shield in 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.

The new contract was signed as the Dirigo board met Tuesday.

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