A key Democratic lawmaker yesterday questioned whether the Maryland Insurance Administration acted illegally by allowing HMOs to automatically pass on to their customers a tax imposed upon them by the General Assembly.
The 2 percent premium tax on HMOs was included in legislation on medical malpractice approved during December's special session of the legislature. On Jan. 13, two days after lawmakers voted to override Gov. Robert L. Ehrlich Jr.'s veto of the bill, the Insurance Administration issued a bulletin saying it would allow HMOs to pass along the cost of the tax merely by sending in a letter to the commissioner announcing their intention.
Del. John A. Hurson (D-Montgomery) said state law does not give the agency the power to grant "deemed approval" of such requests for rate increases.
Two of the state's large HMOs, Mid Atlantic Medical Services Inc. and Aetna Inc., have announced they will raise rates March 1. Kaiser Permanente plans to do so on April 1.
The rate increases "simply have not been approved in a legal manner," said Hurson, chairman of the House Health and Government Operations Committee.
A letter from the attorney general's office suggests that the "better legal course" would have been for the Insurance Administration to follow its regular process for individually evaluating requests from insurance companies for rate increases or to have passed a regulation explicitly allowing it to grant "deemed approvals."
Hurson said he plans to call insurance administration officials before his committee next week.
During the debate over medical malpractice, Ehrlich (R) repeatedly warned that HMOs would pass along the premium tax to their members. Revenue from the tax is being used to curb doctors' malpractice insurance costs and increase payments to doctors from Medicaid, the insurance program for the poor.
Slots Foes Build Coalition
A group of lawmakers who oppose expanding gambling in Maryland said yesterday it will reach out to churches and community organizations in their districts in a campaign to defeat slot machine legislation again this year.
Dels. Peter Franchot (D-Montgomery) and Curtis S. Anderson (D-Baltimore) formed the group, which yesterday included about a dozen House members, to try to head off attempts by the governor to win passage of a slots bill.
Franchot said yesterday that the lawmakers hope to build a broader grass-roots coalition that can persuade undecided lawmakers to oppose the legislation.
They also will try to ward off any attempt to move slots legislation out of the House Ways and Means Committee -- where it has stalled for the past two years -- for a vote on the House floor. House Speaker Michael E. Busch (D-Anne Arundel) has not ruled out the possibility that slots legislation could reach the floor for a vote this year.
"The consensus is, if a bill gets out onto the floor, you lose control of the process," Franchot said.
Child Welfare Staff Grows
Maryland Human Resources Secretary Christopher J. McCabe told legislators yesterday that his department is within reach of a long-elusive target of hiring sufficient child welfare staff.
McCabe said that by the end of the month, the department will have 1,897 caseworkers and supervisors, clearing a target of 1,891 that reflects a federal standard.
The department has struggled to hire and retain the workers, who are charged with protecting abused and neglected children.
Staff writer Matthew Mosk contributed to this report.
