Seeking to meet the needs of patients burdened by overwhelming hospital expenses, the Montgomery County Council has passed a bill that would provide catastrophic health insurance to people living or working in the county.
Several insurance companies expressed interest in providing the coverage after the council action Thursday, according to the bill's sponsor, Council President William E. Hanna Jr. County officials said that the voluntary program to pay large hospital and doctor bills not covered under regular insurance is the first of its kind in the nation.
County Executive Charles W. Gilchrist, who has expressed his support of the measure, is expected to sign the bill within a week.
The county would administer and oversee the program but would not be involved in the actual insuring of individuals. The insurance company would pay all claims and assume the risks, according to Hanna.
Hanna, who introduced the bill a year ago, said it would benefit county residents and workers who unexpectedly find that they must struggle to pay massive bills from long-term illness, conditions that require specialized treatment or other health problems.
For the family of Barbara Whitlock Pitts, 28, of Rockville, who received severe brain injuries in a car accident five years ago, such a program could have relieved the burden of providing expensive rehabilitation treatment needed for her recovery.
"If there had been this insurance for us, it would have relieved our extreme financial burden," said Beverly Whitlock, Pitts' mother. "Our family's main priority has been Barbara's rehabilitation. My last calculation of the costs was more than $300,000, and that doesn't include that last two years. I sort of don't want to know how much the rest costs."
Hanna said the bill would add security for many people whose regular insurance does not offer catastrophic coverage and for low- and moderate-income people who are unable to afford the insurance through normal means.
"With advances in medical technology and the escalation of health care costs, expenditures in excess of $100,000 are no longer rare; all but the wealthiest of families can be bankrupted by the expenses associated with a major illness or injury not fully covered under ordinary medical insurance policies," he said.
Under the plan, catastrophic insurance will supplement ordinary health insurance plans, kicking in to cover expenses over $50,000. Individuals who want the coverage will pay a premium of about $50 a year and must already have regular health insurance. The company offering the policy will be determined by competitive bidding, county officials said.
An insurance company would be able to offer this low rate because of the large pool of people from which to draw subscribers, Hanna said. There are approximately 220,000 households in the county, and hundreds more people work in Montgomery, he said. The plan would not cover health problems that existed before the patient bought the insurance.
The only cost to the county would be minor administrative expenses and promotional activities, said Hanna.
Beverly Whitlock yesterday applauded the program planned by county and the help it would provide for families such as hers.
"You consume your time and life with insurance and how you will get the funding rather than time with the patient and with yourself facing your own emotions," she said.
"Barbara, as many young people, didn't purchase insurance," said Whitlock. "My concern with the bill is that people will not buy the insurance. Nobody thinks it will happen to them."
Despite the unanimous passage of the bill by the council, several members expressed concern about the county's liability if faced with a large lawsuit from a policyholder who did not get adequate payments from the insurance company.
"I was not absolutely secure that we had done a careful enough review and looked at all the liability questions," said council member Esther P. Gelman.
But Gelman said she voted for the bill because "it is something that is long overdue nationwide."
"Whether we can really do it here in Montgomery makes me nervous," she added.
The liability question was the legal snag the bill hit about two weeks ago when it was up for a vote in the council. Gelman and council member David L. Scull expressed serious doubts about the far-reaching liability and antitrust consequences of such insurance.
The bill was sent back to the county attorney, who added a clause stating that if the county is sued and found responsible, the liability lies with the insurance company.
Although Scull said he still had doubts about the bill, he voted for it.
"This bill won't be implemented before the next administration, and there will be time to further examine the legislation," said Scull, who is running for county executive. "It's a brand new endeavor for local government in an area we have very little experience with and where the potential liabilities are great."
The bill directs the county executive to select the insurance company that submits the most competitive bid to provide the insurance. Administration of the plan would also be overseen by the executive.
But Hanna argued that "it is a risk well taken."
Jim Havel, a lobbyist who works on health issues for the National Association of Counties, said he knows of no other such county catastrophic health insurance plan in the country and called the plan "a useful model." Officials from Prince George's County, Fairfax County and the District said they plan to study the Montgomery program.
The Health Insurance Association of America called Montgomery's plan "a good idea."
"We're aware that the public is afraid of going bust because medical bills can bankrupt them," said Benno Isaacs, spokesman for the group.