Md. Takes Initial Step to Shrink Ranks Of Uninsured
Friday, November 23, 2007
The bill that Gov. Martin O'Malley (D) signed into law this week to extend health coverage to an estimated 140,000 people puts Maryland among a growing group of states attempting to chip away at their soaring numbers of uninsured.
By expanding Medicaid, the state-federal program for the poor, to 100,000 adults and offering subsidies to the smallest companies, the governor and General Assembly leaders have targeted some of those who turn up in emergency rooms that provide free care for routine and catastrophic illnesses, pushing up the cost of health care for everyone.
The new law, approved by the legislature in the final hours of a special session that concluded early Monday, had long been sought by health advocates and House leaders.
It is not as comprehensive as advocates would have liked. It falls short of an effort that died last winter that would have extended Medicaid coverage to twice as many people. The new law will cover a fraction of the 14 percent of uninsured Marylanders. The quality, efficiency and cost of providing medical care in the state, which contribute to making insurance unaffordable for many, will go unaddressed.
But as the first major change to the system in years, the $675 million program, funded by a tobacco tax, federal matching funds, a surplus in a high-risk insurance pool and a pot of money now used to cover the uninsured, could lay the groundwork for more ambitious moves.
"This is foundational work," said John M. Colmers, secretary of health and mental hygiene. "Then we can further whittle away at the rest of the 750,000 uninsured."
Although the measure doesn't cover everyone who needs help, he said, the state had to start with people whose low incomes were still too high to qualify them for aid. "There is no market solution for people who are this poor," Colmers said.
About 69 percent of Marylanders got insurance through their jobs last year, compared with 67.7 percent of Virginia residents and 47.5 percent of D.C. residents, according to a study by the Economic Policy Institute in the District.
Small businesses often pay more to cover workers because they lack the buying power of big firms. For the small firms, the risk that someone will have a costly illness is spread across fewer people.
That's why Leonard Lane has never offered insurance to the four full-time and four summer workers he employs for painting and drywall work across Montgomery County. The wife of one of his workers recently ended up in the emergency room because she didn't receive treatment for Lyme disease that had lingered for months.
Lane says he wants to reward his workers, some of whom have been with him five years. "I can give them a raise, but if I could give them a raise and health care, that counts for something," he said. He's worried, though, that premiums for a company as small as his would run as high as the $1,100 he spends monthly to cover his wife and three boys on an individual plan.
The state will spend $30 million a year on subsidies to encourage companies with two to nine workers and moderate incomes to buy policies for employees. Lawmakers estimate that 35,000 people would be eligible. Some part-time workers could be covered, and the state will set a maximum-income limit.
Workers and their bosses will get annual subsidies to help cover the cost of insurance premiums. Employers would receive up to $1,000, and workers would get about $500. Workers won't have to buy insurance but will have to be offered it if their bosses want the money.
A handful of states offer similar subsidies, tax credits or purchasing pools to make insurance cheaper for small businesses. But Maryland's new law has a provision that other states' programs don't: Workers must be offered plans with wellness programs, which are popular in many big companies, that aim to cut costs by encouraging healthy behavior.
"The governor wanted to make sure there was a degree of personal responsibility involved," Colmers said.
By signing up for free gym memberships, weight management advice, smoking cessation classes and by agreeing to control chronic conditions such as diabetes, workers could be eligible for cash rewards or lower deductibles.
The bill was opposed by Maryland's largest business groups because its funding was tied to a package of tax increases, some of which will hit their members.
With subsidies now a reality, small-business leaders say they hope the state has an aggressive plan to market the new benefit.
"This is going to require a real partnership to get the word out to the small-business owner," said Ellen Valentino, Maryland lobbyist for the National Federation of Independent Business, which represents small firms.
The measure is also designed to help people such as Barbra Lancelot, who had health insurance a year ago.
Lancelot, nearing 60, was laid off from a job working with preschool children and could not afford the monthly $376 premium to stay on the company's health plan. She suffers from three chronic illnesses: arthritis, fibromyalgia and depression.
She now works from her basement apartment in Silver Spring as a writer for nonprofit groups. Lancelot estimates that she will make less than $15,000 this year, making her eligible for the new Medicaid benefit. "I'm considered to be one of the lucky ones," Lancelot said. "What about the other 750,000 people? What will happen to them?"
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, with benefits limited to those earning less than half of the federal poverty rate.
The Medicaid coverage will expand over four years, first covering parents with incomes of less than $20,000 for a family of three -- about 30,000 people. Single, childless adults are next, as long as their income is 116 percent of the federal poverty level, about $12,000.
The health bill includes a pot of money for Prince George's County, whose financially troubled health-care system treats many low-income and uninsured people. Dimensions Healthcare System, which operates Prince George's Hospital Center and other county facilities, will get $50 million over four years, but only if the legislature or state and county leaders can reach a long-term financial solution for the system.
Staff writer Ovetta Wiggins contributed to this report.