Mayor unveils health cost plan

Small companies would pay less for medical insurance under his proposal, O'Malley says

Maryland Votes 2006

July 13, 2006|By DOUG DONOVAN | DOUG DONOVAN,SUN REPORTER

Mayor Martin O'Malley unveiled yesterday a plan to help Maryland's small companies pay less for medical insurance, the second in a series of health care promises that his gubernatorial campaign is rolling out this month.

O'Malley's initiative calls for providing tax incentives to companies that offer health care plans and for creating a statewide purchasing pool of businesses to reduce their premiums.

A third part of the plan calls for creating a $30 million reinsurance fund to lower health insurers' risk of providing medical coverage to companies participating in a state program known as the comprehensive standard health benefit plan.

The average costs of the plan increased for the 51,000 companies that participate, from $4,335 per employee in 2004 to $4,573 in 2005, according to a May report from the Maryland Health Care Commission. The number of people covered declined from 489,473 in 1998 to 447,850 last year, the report states.

The $30 million reinsurance fund would assume a large part of the costs associated with high-risk employees participating in the plan. That could allow health insurance providers to charge lower premiums to participating companies.

O'Malley said the reinsurance fund could be financed from a $100 million surplus in another state plan that provides medical coverage to people who cannot get health care because of medical conditions.

That program, the Maryland Health Insurance Plan, is financed by $85 million from individual premiums and fees charged to hospitals, and has a surplus of $52 million plus $40 million in reserves, said Richard Popper, the plan's executive director. The surplus, he said, is being used to reduce costs and increase benefits.

O'Malley and his running mate, Del. Anthony G. Brown of Prince George's County, have tried to portray Gov. Robert L. Ehrlich Jr. as siding with insurance providers and prescription drug companies over consumers and small businesses.

Tuesday Brown introduced the campaign's plan for prescription drug relief, including allowing patients to buy lower-cost medicine from Canada.

"Our governor, Bob Ehrlich, has done nothing" to help lower health care costs, Brown said yesterday. "'Don't get sick' - that's our governor's health care policy."

Ehrlich's campaign has criticized the mayor's proposals for lacking details about how O'Malley would pay for such initiatives.

"He would have to raise taxes to implement these programs," said Ehrlich campaign spokeswoman Shareese N. DeLeaver.

doug.donovan@baltsun.com

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