Wider Health Coverage Plan Proposed for Md.

Gov. Martin O'Malley yesterday announced a plan to ensure more Marylanders get health care.
Gov. Martin O'Malley yesterday announced a plan to ensure more Marylanders get health care. (By Toni L. Sandys -- The Washington Post)
By Lisa Rein
Washington Post Staff Writer
Friday, October 26, 2007

Gov. Martin O'Malley and Democratic legislative leaders yesterday proposed providing health insurance to 100,000 poor uninsured adults in Maryland and subsidizing small businesses that offer coverage to their employees.

The General Assembly will consider the plan, pushed by health advocates for three years, during a special legislative session that starts Monday. As state leaders prepare to raise taxes to close a $1.7 billion budget shortfall, a long-sought expansion of health-care coverage could sweeten a package that could be hard for many lawmakers to swallow.

"Despite our wealth as a state, 800,000 of our neighbors go without health care," O'Malley (D) said. But even with an expansion of Medicaid, the state-federal program for the poor, and subsidies for middle-class workers, only a portion of the 14 percent of Maryland residents without insurance would get it under the proposal.

The universal coverage pursued by Massachusetts, California and other states is a long-term goal for Maryland that will be met only "when we have a new administration" in Washington, O'Malley said.

Health care, particularly Medicaid and treatment of chronic disease, consumes about 25 percent of the state budget. Those costs could shrink if fewer uninsured people received costly care in emergency rooms, O'Malley said. Those with insurance end up paying higher premiums to cover the medical care of those without.

"We are all paying $1,000 out of our premiums to help the uninsured," said Del. Peter A. Hammen (D-Baltimore), the House health committee chairman, who with Speaker Michael E. Busch (D-Anne Arundel) led an unsuccessful effort to expand health-care coverage last winter.

Maryland offers children from poor and low-wage families some of the most generous health benefits in the country. But the state's coverage for adults ranks among the worst, limiting benefits to those earning less than half of the federal poverty rate.

Under the proposal, Medicaid would expand over four years, first covering parents with incomes of less than $20,000 for a family of three -- about 30,000 people. Then adults without children -- who now are eligible only if their income is 40 percent of the federal poverty level, or about $5,000 -- would be covered.

The state also would give insurance subsidies to employees earning less than $50,000 at firms with up to nine workers, about 5,500 companies that don't offer benefits. Another 4,000 small businesses that provide coverage also would get help from the state to prevent them from dropping it. And to encourage workers with chronic illnesses to participate in wellness programs to lower the cost of their care, the state would offer discounts on their deductibles.

The governor's office also plans to allocate $10 million to improve the quality and efficiency of care through a statewide electronic record-keeping system, which has been slow to come to Maryland. With such a system, information about patients can be readily available to doctors, who can document prescriptions and medical orders electronically. Such systems, which have been adopted by other states, can reduce errors and curb unnecessary tests.

The plan would cost about $675 million, $250 million of that in state money, health secretary John M. Colmers said. The state's contribution eventually would include revenue from the $1-a-pack increase in the cigarette tax that O'Malley has proposed to help close the deficit. Federal matching funds for Medicaid, a surplus in an existing high-risk insurance pool and a reshuffling of Maryland's practice of reimbursing hospitals for the free care they provide to the uninsured would help make up the rest of the cost. If there is no money in the budget to expand coverage as the program ramps up, it wouldn't be expanded, Colmers said.

The governor's plan is less ambitious than the bill to expand Medicaid to twice as many people that died last winter. It passed the House by a wide margin, but stalled in the Senate, where President Thomas V. Mike Miller Jr. (D-Calvert) balked at embarking on a costly new program until the state closed the budget deficit. O'Malley also had a limited appetite for such a big-ticket initiative.

Miller called yesterday's proposal more palatable because it's less costly and does not rely as heavily on the tobacco tax, believed to be a declining source of revenue as fewer people smoke. But he said an expansion of health-care coverage is unlikely to pass before the legislature approves other pieces of the governor's budget package, which includes legalizing slot-machine gambling and higher sales tax and income tax on higher-income residents.

"This is happening within the context of addressing our fiscal challenges," said Sen. Rob Garagiola (D-Montgomery), who stood next to the governor with Hammen at yesterday's announcement.

Staff writer John Wagner contributed to this report.

© 2007 The Washington Post Company