Ehrlich poses using surplus for doctors' rate increase

Funds to insure sickest in state would be diverted

December 09, 2004|By Andrew A. Green | Andrew A. Green,SUN STAFF

Gov. Robert L. Ehrlich Jr. proposed yesterday staving off the 33 percent malpractice insurance rate increase most doctors face on Jan. 1 by using surplus money from a fund that guarantees insurance coverage for Marylanders too sick to buy policies from commercial carriers, House Speaker Michael E. Busch said.

Ehrlich confirmed that, during a meeting with Busch and Senate President Thomas V. Mike Miller, he proposed a new idea to pay for a fund that would hold down malpractice insurance rates. But the governor has been reluctant to discuss the details of the negotiations aimed at producing a special session of the legislature before the end of the year, and he didn't say what his plan is.

Busch called "unconscionable" what he said was Ehrlich's idea to use money from the assessments on hospitals that guarantee the viability of the Maryland Health Insurance Plan, although Busch said the plan has a surplus of between $20 million and $50 million. People with diseases such as AIDS, Alzheimer's, Crohn's, leukemia, lupus, multiple myeloma and Parkinson's qualify for the program.

"That underwrites the most vulnerable people ... the sickest of the sick and the poorest of the poor," Busch said. "We're not going to use the money from that fund and drive people into emergency rooms."

Ehrlich, however, used a similar argument against lifting the exemption that HMOs are granted to the 2 percent premium tax that insurance companies pay, which is the funding source favored by Busch and Miller. HMOs would pass the tax on to patients and would disproportionately affect people who are relatively poor, Ehrlich said.

"That's regressive," he said.

Despite the deadlock over a funding source, Ehrlich said progress continues on other issues, particularly on limits to malpractice lawsuits, known as "tort reform."

Ehrlich, who favors tort reform, said he has dropped some of his proposals, such as limiting attorneys' fees. And Miller, who has opposed many elements of tort reform, has given ground on limits to the economic damages that can be collected in wrongful death cases, mandatory mediation and other proposals, Ehrlich said.

Miller left immediately after meeting with Ehrlich and Busch and could not be reached for comment.

Ehrlich and Busch both said there is broad agreement on new patient safety measures and on increasing Medicaid reimbursements to doctors.

Ehrlich said he remains optimistic that all sides will agree on a solution in time to hold a special session this month. Doctors have warned that if something isn't done before rate increases go into effect, many physicians, particularly those in high-risk specialties such as obstetrics and neurosurgery, might close their practices or leave the state.

Busch said a session would have to occur next week, otherwise too many legislators will be away for the holidays. But he said the path to a solution is clear: a combination of the tort reform proposals already agreed to by the House and Senate and an HMO tax.

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