Montgomery County Executive Charles W. Gilchrist signed legislation yesterday that officials and insurance experts said would make Montgomery the first jurisdiction in the country to provide insurance for health catastrophes to people living or working in the county.
No specific details of the county health insurance plan have been worked out, and the program is not expected to be implemented for six months to a year, county officials said.
The insurance for health catastrophes will supplement ordinary health insurance plans, to cover expenses exceeding $50,000. Individuals who want the voluntary coverage will pay a premium of about $50 a year, county officials said.
"I think it's a good idea and well worth a try," said Gilchrist. "It could very well provide a pool of people that would need catastrophic insurance, and that would permit very reasonable rates."
The county will be responsible for administering and overseeing the program but will not be involved in the actual insuring of individuals.
An insurance company, chosen through competitive bids, would be responsible for paying all claims and assuming the risks, according to Montgomery County Council President William E. Hanna Jr., who introduced the legislation about a year ago.
Despite the sketchy details about the program, it was hailed yesterday by national consumer groups and county officials as the springboard to an insurance plan that would cover massive bills for long-term illness, conditions that require specialized treatment or other health problems.
"It's an excellent idea," said Robert Hunter, president of the National Insurance Consumer Organization. "I only wish it was a nationwide plan. This should not be left to individual counties to deal with."
Sidney M. Wolfe, director of Public Citizen Health Research Group, said the program was necessary because "a large number of people have health insurance coverage that would not prevent a financial catastrophe in the event of a really serious illness requiring long-term hospitalization.
"This kind of coverage might prevent their financial ruination. And we're not just talking about poor people."
For years, Sen. Edward M. Kennedy (D-Mass.) has proposed a national health insurance plan that also would cover catastrophic illness, but he has never been able to push his legislation through Congress.
"The 1978 plan was due for serious consideration at about the time when we hit high inflation and everyone thought it was important to hold down the federal deficit," said a staff assistant to Kennedy.
Kennedy's national insurance plan would require all employers to provide health care coverage to all employes, according to the aide. Federal funding would have been needed to cover the unemployed.
Hanna and other county supporters of the program said its low-cost premium would make it very attractive to residents and employes from all income levels.
Tom O'Connor, a spokesman for Mutual of Omaha Insurance Co., which advertises itself as the largest individual health insurance company in the world, said that a 20-year-old male living in Rockville would have to pay a yearly premium of $125 for insurance to cover catastrophic illness to equal what the county will offer.
Many group insurance plans offer an unlimited dollar amount of coverage, according to a spokesman from the Prudential Insurance Co. of America.
But Hunter of the National Insurance Consumer Organization responded, "Most people are not aware that their group coverage is related to their employment, so if their employment is interrupted because of a serious injury or sickness, they lose it. Employers have an incentive to lay you off if you become seriously ill for a long period of time because it drives up the cost of their health insurance plan."