Bid to Expand Medicaid Gets Fresh Momentum

By Lisa Rein
Washington Post Staff Writer
Wednesday, September 12, 2007

Maryland health advocates and their allies in state government are reviving legislation to extend medical coverage to thousands of uninsured residents, an ambitious plan similar to one that died this year in the General Assembly.

As advocates today unveil their third effort in as many years to map a path toward universal health coverage, lawmakers and aides to Gov. Martin O'Malley (D) say a new window of opportunity for change is opening -- even as state leaders struggle with a $1.5 billion budget shortfall.

The renewed momentum for a proposal to offer coverage to a portion of Maryland's 800,000 uninsured residents is rooted in political strategy: A deal to close the deficit with spending cuts, tax increases and revenue from slot-machine gambling could require the state's political leaders to reach an agreement to address soaring medical costs.

"We're hoping the stars are aligned," said Vincent DeMarco, president of the Maryland Citizens' Health Initiative, which will announce its support today for an expansion of Medicaid, the federal-state insurance program for the poor, through a $1-a-pack increase in the tobacco tax. "Our goal has been to raise this and make it an issue, and it's not going away."

A bill to expand Medicaid to up to 200,000 poor adults and children cruised through the House of Delegates during last winter's legislative session. But the plan, the highest priority for House Speaker Michael E. Busch (D-Anne Arundel), withered in the Senate, where President Thomas V. Mike Miller Jr. (D-Calvert) balked at raising a tax to fund a new program until the deficit was addressed. O'Malley, then in his first session, also had little appetite for big-ticket changes. Lawmakers left in April after passing a modest law that requires insurance companies to cover children up to age 25 on their parents' policies.

Now, though, the governor's aides say he is behind an effort to contain health costs, although the breadth and financing of the plan are still taking shape. Some expansion of Medicaid is likely, given that Maryland's coverage for poor adults ranks among the lowest in the country. Also on the table is relief for the middle class, through a subsidy to small businesses to help their workers buy insurance.

"What's changing is that we're on a path to righting the ship and stabilizing our finances," said Joseph C. Bryce, O'Malley's chief legislative officer. "We're looking at health care in the bigger balance now."

As the governor works to build an agreement between Miller and Busch on how to bring the budget into balance, health care appears to be a wedge that could make or break a deal. The state's legislative leaders have long been at odds over slots, with Busch opposed and Miller in favor. Busch is unlikely to accept slots without a deal on health care, lawmakers and aides say, while Miller is unlikely to yield on health care without slots.

"The governor and the Senate president really want to push slots," said Del. Peter A. Hammen (D-Baltimore), the Health Committee chairman and House sponsor of the health-care bill. "The speaker is resistant to that approach. There's an opportunity to negotiate and compromise. We know slots is on the table. So is health care."

Added Sen. Thomas M. Middleton (D-Charles), who as Finance Committee chairman will vet any health plan that comes before the Senate, "The governor's got something both Mikes want: health care and slots."

With legislative leaders in disagreement on whether to hold a special session this fall to address the budget shortfall, it is uncertain whether the General Assembly will take up health care before January, when the annual 90-day session begins. But DeMarco said his group decided to press ahead today, "just in case there is a special session."

Maryland is joining Massachusetts, California and other states that are trying to address soaring health-care costs with a variety of strategies. Maryland officials say they are unlikely to press for contributions from employers, hospitals and doctors or mandate individual coverage during the next legislative session. They say their approach must first address the stingy Medicaid coverage the state offers to poor adults, limiting benefits to those earning less than half the federal poverty rate.

"Until you improve the eligibility for Medicaid, you can't do anything," Busch said. "We've just been ranked the wealthiest state in the nation, yet 16 percent of Marylanders don't have health insurance."

Medicaid, however, is one of the biggest expenses in state government and accounts for 15 percent of the budget. The program is growing 5 to 7 percent a year.

A $1-a-pack cigarette tax would generate about $200 million at first but could gradually decline as fewer people choose to smoke. House leaders say hundreds of millions of dollars more could be leveraged from the federal government to enroll new adults in Medicaid. Eventually a fund that pays the hospital costs of the uninsured could be diverted to pay for the new plan as fewer patients without coverage flood emergency rooms, they say.

Middleton, however, said he does not think the Senate will go along with as big an expansion of Medicaid as the House will.

© 2007 The Washington Post Company