State cuts small firms' required prescription coverage

Panel votes 12-1 for generics-only insurance with high deductibles


Looking to make health insurance more affordable for small employers, the Maryland Health Care Commission approved a plan yesterday to remove most prescription coverage from the required-benefits package for small companies - with the expectation that most employers will buy extra pharmacy benefits.

The commission also approved major expansion projects at both Anne Arundel County hospitals. One of the projects, which will add obstetrics services at Baltimore Washington Medical Center in Glen Burnie, was hotly opposed by a competitor, Harbor Hospital in South Baltimore.

The change in pharmacy benefits, effective July 1, modifies the standard benefits package that covers 450,000 Marylanders. Brand-name drugs would be excluded altogether and high deductibles - $2,500 for individuals or $5,000 for families - would have to be met before any benefits would be paid for generics.

Employers with up to 50 workers are required to provide at least the standard package if they offer group health coverage.

Already, about 90 percent of the 50,000 participating employers buy coverage beyond what's mandated, and Dr. Rex Cowdry, the commission's executive director, predicted few would drop back. "One of our goals was to design a plan that no one purchases," he said, without extra benefits. By the state requiring only a token pharmacy benefit, insurers could create a variety of pharmacy benefits plans at prices that might entice more employers to buy insurance, Cowdry said. Constance Row, the only commission member to dissent in a 12-1 vote, questioned that assumption.

"The thing that bothers me is that this is a hypothesis that's being tested," Row said. "It will leave employers with an option of offering only [coverage for] generics with a high deductible, and I expect we will see a fair number of employers choosing that option."

But Gail R. Wilensky, commission vice chair, said commission members needed to remember that a majority of small employers don't offer health insurance at all.

"What we want to do is give employers an option to going to that minimum," she said.

Without debate, the commission approved a $210 million expansion at Anne Arundel Medical Center in Annapolis.

The expansion will add a nine-story patient tower, increasing bed capacity from 208 to 277.

But a project at Baltimore Washington Medical Center, until this year known as North Arundel Hospital, brought objections from Harbor Hospital.

The Baltimore Washington project, costing $112 million, will include a six-story tower and increase bed capacity from 273 to 293, including 18 beds for the new maternity service.

Stephen J. Sfekas, a lawyer representing Harbor, said there was no need for another obstetrics program in the area, and that opening one at Baltimore Washington could harm Harbor by cutting births there, now about 2,000 a year, by more than 20 percent. He also said approval should be delayed until the public has a chance to review last-minute changes in Baltimore Washington's plans.

Jack C. Tranter, a lawyer representing Baltimore Washington, said the new service wouldn't damage Harbor, and would improve care in the Glen Burnie area, particularly for under-served poor and minority women. Baltimore Washington is part of the University of Maryland Medical System, and the new program will include medical residents and a satellite of the University of Maryland Center for Advanced Fetal Care.

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