News mixed for small Md. businesses' health costs

They pay more for some coverage, less for others

September 15, 2004|By M. William Salganik | M. William Salganik,SUN STAFF

Small employers in Maryland are generally paying slightly less for individual health coverage than small employers in surrounding states, but more for family coverage, according to a report released yesterday by the Maryland Health Care Commission.

The report also found that Maryland's small employers - those with fewer than 50 workers - are generally more likely than those in surrounding states to offer health insurance to their employees.

The commission requested the report because, under a 1993 law designed to make coverage more available and more affordable, it regulates small-employer policies in Maryland. The panel sets standard benefit packages, which small firms must offer if they provide health insurance.

The system creates a large pool - about 450,000 Marylanders are covered by the policies - to spread risk, helping control rates for small employers that have workers with poor health. By offering standard benefit packages, it makes price shopping easier.

How well Maryland's system is functioning becomes more of an issue as health costs rise. A national survey by the Kaiser Family Foundation, released last week, reported the fourth straight year of double-digit inflation in health premiums and projected that employers - particularly small ones - might not be able to afford coverage.

For years, small-business trade groups in Maryland have called for more flexibility to offer coverage with lower benefits than those of the state's standard packages so that more employers could afford coverage.

On the whole, "Maryland looks relatively decent when you compare us to surrounding states," said Enrique Martinez-Vidal, the commission's deputy director for performance and benefits, who presented the report. The data came from a federal survey in 2002, which Martinez-Vidal said was the most recent available allowing state-by-state comparisons.

Comparing premiums to average wages, he told the commission, Maryland does better than most of its neighbors.

His report touched off discussion among commission members on how well the Maryland plan is achieving its goals.

Commissioner Stephen J. Salamon noted that family premiums in Maryland were 5.5 percent higher than the national average and nearly 10 percent higher than those in Virginia.

"If you are a family in the state of Maryland, perhaps with income under the median, it's still a challenge," Salamon said.

Dr. Donald E. Wilson, the commission chairman, said Maryland is a high-income state, which is relevant in judging whether health insurance is affordable.

In other action yesterday, the commission rejected an application by Shady Grove Adventist Hospital in Rockville to open a first-of-its-kind satellite emergency room in Germantown, in northern Montgomery County.

The hospital argued that its Rockville emergency room, with 85,600 visits to a facility built for 50,000, was overburdened and that communities to the north needed services.

Constance Row, a commissioner who conducted a hearing and recommended rejecting the proposal, said it was "the most expensive possible solution" to the needs in northern Montgomery. The hospital failed to make a case for a full emergency room rather than a less-expensive urgent care facility, she said.

Jack Tranter, a lawyer representing two other hospitals objecting to the plan, said approval would have led to requests to create "mini-hospitals around the state."

Deborah A. Yancer, president of the hospital, said after the decision, "We will continue to fight" but that she is unsure whether the hospital will appeal the decision in court, modify its plan or take some other action. "The urgent care model won't respond to the growth in the community," she said.

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