Maryland work site health tab is in line

Insurance premiums compare with those paid in other states

January 16, 2004|By M. William Salganik | M. William Salganik,SUN STAFF

Maryland employers pay health insurance premiums comparable to those in other states, according to a study released yesterday by state regulators.

State business groups have long complained that the high number of required benefits drives up the price of insurance in Maryland. But the report found premiums to cover single employees in the state were roughly equal to the national average, based on a national survey taken in 2001.

For family coverage, Maryland premiums were about 8 percent below the national average for employers with up to 100 workers, and about 8 percent above for larger employers. McLean said she was not sure why large employers are paying more, relative to national benchmarks.

The study was the first such survey to be included in the state's annual tally of health costs in Maryland. The report also reported, based on insurance claims data, that health care spending in the state rose 11 percent to $22.6 billion in 2002, outpacing the national rate of 9 percent.

With many employers increasing co-payments and deductibles, the report found that out-of-pocket spending for health increased 15 percent.

"We always get questions about whether Maryland's regulatory system imposes different requirements that make insurance more costly," said Barbara G. McLean, executive director of the Maryland Health Care Commission, which commissioned the study and which regulates small-employer health coverage in the state.

The report seems unlikely to quell the debate, however.

"This should be no consolation for the Maryland Health Care Commission, or feeling of satisfaction," said Ellen Valentino, state director for the National Federation of Independent Business, a group of small employers. "They should still be moving more aggressively to look for ways to reduce health care costs in Maryland."

Businesses are not required to offer health coverage at all. Maryland requires small businesses (up to 50 employees) that do so to offer a "comprehensive" benefit plan that includes more than two dozen benefits, ranging from ambulance service to glucose-monitoring equipment to hearing tests for newborns.

The standard benefit package was designed, in part, to make it easier for small employers to compare prices of policies. Also, supporters say many of the required benefits are typically offered in health insurance policies elsewhere, even if they're not required.

Valentino said her group would like small employers to have the flexibility to offer lower-cost coverage with fewer benefits. That would allow some employers to provide insurance who can't afford the comprehensive package, she said.

McLean estimates that about half of small employers in the state don't offer health insurance.

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