Lawmakers, Ehrlich digging in heels over malpractice subsidy

Bills from both chambers would tax HMO premiums

Governor promises a veto

Administration prefers using taxpayer funds

General Assembly : Special Session

December 29, 2004|By David Nitkin, M. William Salganik and JoAnna Daemmrich | David Nitkin, M. William Salganik and JoAnna Daemmrich,SUN STAFF

The opening day of a rare special session of the Maryland General Assembly ended with legislative leaders locked in a showdown with Gov. Robert L. Ehrlich Jr. over how to subsidize the insurance bills of doctors.

Both the Senate and House of Delegates rejected a malpractice reform proposal unveiled by Ehrlich last week that would impose some limits on lawyers and lawsuits, and use general taxpayer dollars to assist doctors with their insurance bills.

Instead, each chamber passed competing versions of malpractice plans that are alike in one key respect: They contain a tax on health maintenance organization premiums that Ehrlich promised to veto. The proceeds of the temporary tax, estimated at about $80 million yearly, would defray insurance costs.

FOR THE RECORD - An article Wednesday incorrectly stated the number of Democratic senators who voted for Gov. Robert L. Ehrlich Jr.'s version of a medical malpractice bill. While only one Democrat senator, Roy P. Dyson of Southern Maryland, sided with Republicans on the final Democrat-backed legislation, three Democrats voted for an amendment that would have restored the governor's bill. They were Dyson, James Brochin of Baltimore County and Gloria G. Lawlah of Prince George's County. The Sun regrets the error.

A committee of House and Senate negotiators was to begin meeting today to craft a compromise bill, which could include many provisions supported by Ehrlich. But barring unforeseen changes, the final product is expected to include the new levy that the governor said is unacceptable.

"Veto," Ehrlich flatly told reporters yesterday afternoon, when asked what would happen if such a bill landed on his desk. To reinforce his point, he spelled it out: "V-E-T-O."

Later in the evening, he said neither the House nor Senate version provided enough reform: "What we see is a trial lawyer bill, drafted by the trial lawyers, to benefit the trial lawyers."

After months of holding news conferences with doctors to raise visibility of the insurance issue, Ehrlich called for the holiday-week session to address what he says is a growing crisis that limits access to medical care. He called yesterday's results "profoundly disappointing" but said he was not ready to give up trying to craft a plan agreeable to all sides.

"This crisis is real," Ehrlich said during an afternoon news conference. "It gets worse minute by minute, day by day."

Legislative leaders, too, pledged to keep trying and said they were poised to give the governor much of the solution he asked for.

"We all have to come to the middle," Senate President Thomas V. Mike Miller said. "He should sleep on it and declare victory. It's a victory for him."

House Speaker Michael E. Busch called on Ehrlich to accept the House version of the bill, which received preliminary approval shortly before 10 p.m. and which the speaker said contains more of the limits on lawsuits than the governor asked for.

"I think it is an opportunity for the governor to reach out and be the problem solver on this issue, and I hope he takes that direction," Busch said. If the governor vetoes the bill, "it would be like grasping defeat from the jaws of victory."

Nonetheless, the veto threat raises the tangible prospect that the first special session of the assembly since 1992 will end without a resolution to an issue that lawmakers canceled vacation plans to address.

Veto override

Lawmakers could attempt to override a veto when they meet for their regular session next month. A majority of three-fifths would be needed in each chamber.

Leading Republicans blamed the discord on questionable negotiating by Miller and Busch.

Miller, Busch and Ehrlich appeared to have reached an agreement on key aspects of lawsuit reforms earlier this month. But since then, the president threw his support behind a different plan, and the speaker moved forward with his own bill.

"They really messed up this process, in my opinion," said Sen. J. Lowell Stoltzfus, the minority leader from the Eastern Shore. "They reneged on what they agreed to."

Ehrlich sounded aggrieved that the agreement had not held up. "When I was a member here, commitments made were commitments kept," he said.

But Democrats faulted the governor for hastily convening the session - which costs $45,000 a day - without a firm agreement in place.

"Had there been serious negotiations between the governor and presiding officers, they could have reached a solution earlier," said Del. Samuel I. Rosenberg, a Baltimore Democrat.

Miller denied that he violated an agreement, even though Busch says the Senate president agreed to the lawsuit limits contained in Ehrlich's bill. Miller denies he agreed to all elements.

Some components of the governor's plan, such as reducing plaintiffs' awards of lost wages to account for income taxes, "was not explained to me, and I would never agree to that," Miller said.

Democratic leaders say it would be irresponsible to increase spending without offering a way to pay for it. Maryland should follow the practice of about 30 other states and the federal government by removing an exemption that allows HMOs to avoid paying a 2-percent premium tax that all other insurers pay.

`Classic loophole'

Del. Kumar P. Barve, the House majority leader from Montgomery County, said removing the exemption for HMOs was simply closing "a classic loophole." He accused Ehrlich of resisting attempts to close loopholes that allow businesses to avoid taxes.

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