Health plans' deductibles, co-pays raised

State panel seeks to make policies more affordable

Affects 448,000 at small firms

Most companies limit rise in health costs of staff

October 31, 2003|By M. William Salganik | M. William Salganik,SUN STAFF

Complying with a new law designed to make health coverage more affordable, the Maryland Health Care Commission approved yesterday increases in deductibles and co-payments for the small-employer policies that cover 448,000 Marylanders.

The commission also gave preliminary approval to guidelines for a clinical study of whether to allow more hospitals to perform angioplasty, a procedure in which a tiny wire coil and an even tinier balloon are used to unblock blood vessels of the heart.

The study guidelines, hotly debated among cardiologists and hospital administrators, will be subject to a formal comment period and public hearing before the commission takes final action early next year.

Commission staff members said the effect of the higher deductibles - the amounts patients pay each year before insurance coverage kicks in - is unclear because 99 percent of employers pay extra so that they can offer deductibles lower than the state-set standard.

"Co-pays and deductibles can be bought down, and they usually are," Enrique Martinez-Vidal, the commission's deputy director, told the panel.

Martinez-Vidal and the commission's executive director, Barbara G. McLean, said the higher deductibles would meet small businesses' request that they be given flexibility to design medical savings or health reimbursement accounts to pick up some of the medical costs not covered by the insurance.

Deductibles for preferred-provider health plans will increase to $2,500 per person and $5,000 per family from the current $1,000 and $2,000. Small employers who choose health maintenance organization plans will continue to be required to offer them with no deductible.

Co-payments, the patients' share of charges, would also increase, from $35 to $100 for emergency room visits, for example, and from $30 to $50 on prescriptions for brand-name drugs not on an insurer's preferred list.

Maryland law once required that the average cost of small-employer policies - $3,823 last year - be less than 12 percent of the average state wage. After some small employers said they couldn't offer coverage because of the cost, the affordability target was lowered to 10 percent of the average wage.

To meet the new ceiling, McLean said, the only alternative to increasing out-of-pocket charges to patients was eliminating some plan features, such as the requirement that chiropractic services be covered. She said the staff had concluded it would be advisable to preserve current features for a year as state lawmakers consider several health reform proposals.

Commission member Stephen J. Salamon voted against the changes, saying cuts in required features were needed so that more small businesses could afford to offer coverage.

"Small businesses drive the economic engine with jobs, and those folks need help," he said. McLean said about half of small businesses (with two to 50 workers) in Maryland offer health insurance.

Dr. Donald E. Wilson, the commission's chairman, said this is "the time of maximum frustration" for the commission, which wants to make policies affordable but is reluctant to cut benefits. It also lacks authority to deal with some important cost components, such as insurers' administrative costs.

The guidelines on the angioplasty study are part of a proposed package updating the state's rules on heart services. The nine hospitals permitted to perform heart surgery do almost all of the angioplasties in the state - 11,500 procedures last year, generating $130 million in hospital bills.

An additional 11 hospitals are permitted to perform angioplasties on an emergency basis for patients in the middle of heart attacks, and some are interested in expanding the service to scheduled angioplasties.

Critics have argued that the study to determine whether patients could receive nonemergency angioplasties at hospitals that don't do heart surgery would be dangerous for patients. The American College of Cardiology recommends that angioplasties be performed only at hospitals that can perform heart surgery in case of complications.

Pamela Barclay, the commission's deputy director, told the panel that there is no clear research on the danger of the procedure and that the proposed rules would set up "a rigorous review process which assure, we think, patient safety and the highest ethical standards."

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