Senators weigh big boost in Medicaid

Draft plan would expand increase passed by House

Health care

April 10, 2004|By M. William Salganik | M. William Salganik,SUN STAFF

As the Maryland legislature and the governor wrestled over budget issues, state senators moved yesterday to expand increased Medicaid coverage approved by the House.

The draft Senate plan would extend full insurance coverage through the Medicaid program to more than 75,000 parents with incomes up to $28,275 for a family of four, or 150 percent of federal poverty level. The cutoff is currently 45 percent or lower.

The plan is estimated to cost the state $115 million a year in fiscal 2008, when its phase-in would be complete. Unlike the House bill, it would offer hospitalization.

Prepared by the health subcommittee of the Senate Finance Committee, the revised plan is expected to go before the full committee this morning and to the Senate floor in the afternoon.

Sen. Thomas M. Middleton, the Southern Maryland Democrat who chairs the Finance Committee, supports the proposal, saying the state's budget wrangles gave him "a greater sense of urgency" to offer coverage to some of the state's estimated 700,000 uninsured.

Medicaid covers about 500,000 people now, most of them children and the elderly.

Putting more state money into the program, he said, would qualify Maryland for more federal matching dollars as well.

Vincent DeMarco, who heads an advocacy group seeking health care for all, called the draft Senate plan "a strong bill" that would represent "a very good step forward."

The expansion, however, faces a number of uncertainties. If passed by the full Senate, it still would have to be reconciled with the House version in the waning days of the legislative session.

And it faces a potential veto from Gov. Robert L. Ehrlich Jr., who doesn't like the way it would be financed - a tax on HMO premiums. Health maintenance organizations currently are exempt from the 2 percent tax on premiums on other health insurance. The House-passed bill slapped a 1 percent tax on HMO premiums, but the Senate plan would double that.

A Maryland expansion of Medicaid coverage would come at a time "most states are holding the line or rolling back a little," said Stephen Zuckerman, a health economist at the Urban Institute, a Washington think tank.

The Senate proposal, Zuckerman said, would vault Maryland from a "pretty low" eligibility for Medicaid to "among the more generous states in coverage."

The House-passed version would cover about 45,000 more uninsured people than the Senate plan - up to 200 percent of the poverty guideline, or $37,700 for a family of four - but would offer more limited benefits. The House bill would cover primary and some specialty care, but not hospitalization, unlike the Senate bill. Currently, cost of treating the uninsured in hospitals is covered by offsetting increases in hospital rates

Both House and Senate versions would also seek to improve access to health care by providing grants to community and school-based health clinics and by raising fees to entice more doctors to participate in the Medicaid program.

DeMarco urged the Senate to pass, and the House to adopt, full coverage rather than limited benefits. Otherwise, he said, uncompensated care in hospitals would increase, adding to the cost for employers who provide health insurance for their workers.

Critics questioned the wisdom of such a large expansion, particularly as the state is struggling over how to pay for the Thornton plan to expand education spending.

"This is a true social commitment at the time we're still arguing over the funding of Thornton," Ellen Valentino, state director for the National Federation of Independent Business, told a finance subcommittee work group meeting yesterday. "This is a tremendous social burden that, at the end of the day, you'll be sitting here wondering how to fund."

And D. Robert Enten, a lobbyist for Mid Atlantic Medical Services Inc., one of the state's largest health insurers, told the lawmakers that his company would pass the tax on to consumers through increases in premiums.

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