Health plan for all studied

Universal program for Maryland called financially viable

`Really a political question'

Families would pay for coverage in higher taxes

May 02, 2000|By Diana K. Sugg | Diana K. Sugg,SUN STAFF

A new health system in Maryland that would include all residents, including 760,000 uninsured people, could save money while providing quality care, according to a new analysis to be released this morning.

A statewide coalition pushing for sweeping reform commissioned the study to get the price tags for two different plans, both of which aim to give residents good, comprehensive health care, choice of providers and no interference from third-party payers such as insurance companies.

"Economically, it can be done," said Dr. Peter L. Beilenson, Baltimore health commissioner and the coalition's president. "It's really a political question."

The coalition, the Maryland Citizens' Health Initiative, is calling for reforms that would change how people pay for their health care and greatly reduce the role of private insurance companies.

While the group has no authority to institute these ideas, it is trying to build momentum.

So far, it has persuaded about 550 community, business, religious and labor organizations across the state to sign on to the campaign.

Ultimately, members hope to make it an issue in the state legislature in 2002, where it likely will face fierce opposition from health insurers and businesses.

Under the first proposed plan, similar to Medicare, or the Canadian system, everyone would be covered by a single health plan run by a government agency.

Private insurance companies wouldn't be needed, unless people wanted to buy policies for services not covered, such as eyeglasses, orthodontics or cosmetic surgery. This design, called single payer, would save a small amount -- about $346 million in the first year -- or 1.7 percent of the total health spending in Maryland, the study says.

Most studies of similar plans have found increased costs in the first several years, because it's expected that the previously uninsured would swamp the system.

But Maryland's proposed plan includes cost-saving elements borrowed from managed care: $10 co-pays for doctor visits; a primary care physician, who refers patients to specialists; as well as some review of doctors' practice patterns.

People could see specialists without referrals by paying more.

"I think it's worth considering because it does accomplish a lot. It's pretty impressive," said John F. Shiels, vice president at the Lewin Group, who did the study.

Shiels has evaluated several similar models over the past several years and never seen any savings until analyzing this plan. "They exercised discipline," he said.

Single-payer plans also save money through administrative simplification, because there aren't multiple plans with different claim forms, benefit packages and rules.

In the second proposed model, a Canadian-style plan would be in place, but private companies could opt out and keep their health coverage as is.

This second option would cost slightly more, about $207 million, or 1.1 percent, than what is already spent on health care in Maryland.

Under both designs, rather than deductibles and premiums, people would pay for their health care through increased income and payroll taxes.

Because payments would be in proportion to earnings, lower- and middle-income families would generally have to pay less than they pay now, while those families earning above $100,000 would have to pay more.

Employers would also be contributing through the payroll tax. Small businesses that aren't paying for health benefits would have to, which could cost as much as $1,300 per worker per year, according to the study.

The idea of a Canadian-style plan has been around for many years, but advocates around the country have never succeeded in pushing it through.

Vincent DeMarco, the coalition's executive director, said his group is not endorsing either plan; instead, coalition members will travel the state, holding public forums and gathering comments in order to develop a proposal.

In the past several years, state officials have tried to help the uninsured by expanding coverage for pregnant women and children and creating a program for small business workers to get better insurance rates.

The state health secretary, Dr. Georges Benjamin, said many issues need to be addressed, including more health coverage for working adults. Most of the uninsured are working and either can't afford insurance or choose not to pay for it.

"All of us involved in health policy will be poring through this information to fully understand what these numbers mean, and also what would happen if we did things differently," he said.

Already, though, some business leaders say the plan would be a disaster.

They say small businesses, particularly those with five or six employees, couldn't afford the extra costs and would go out of business. Some might move out of state, critics say, while sickly people would move to the state to take advantage of the plan.

According to Jim Weidman of the National Federation of Independent Business, his group analyzed a similar plan several years ago and found that in Maryland, it would cause 75,000 people to lose their jobs, with many others having their salaries or hours reduced.

But many Americans want something done. Polls consistently find health issues among the top concerns of voters nationally, who are worried about patient rights, health care costs and the uninsured.

A soon-to-be-published Harvard study found that medical bills and illness were at least partly to blame for nearly half of the 1 million Americans who filed for bankruptcy protection last year.

And despite expansions in some government health programs, Shiels said, 1 million more people have become uninsured in the United States every year for the past 20 years.

Information about the Maryland Citizens' Health Initiative:

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