Cost of health plan put at $2.5 billion

Panel studied options for state's uninsured

February 16, 2007|By M. William Salganik | M. William Salganik,Sun reporter

In November, the staff of the Maryland Health Care Commission floated an innovative plan for health coverage - covering nearly all of the uninsured, guaranteeing generous benefits, offering substantial premium subsidies for low- to moderate-income families, and giving every insured person or family a choice of plans.

While elected officials worked on more incremental plans, the commission set out to cost out its plan. Yesterday, the bill was presented: $2.5 billion a year in state funds.

"This is a total non-starter," said Dr. Rex W. Cowdry, executive director of the commission, in presenting the cost projections.

While lawmakers and Gov. Martin O'Malley have expressed interest in covering more of the uninsured, they've been worried about whether the state could afford several more modest plans, estimated to cost in the $200-million-a-year range.

Cowdry said the plan that was studied represented "the most extreme design option," and that the commission would begin to look at options for less-comprehensive benefits.

Although it will be offering data to lawmakers during this legislative session, Cowdry said the commission wouldn't be able to complete its study of alternatives before lawmakers adjourn.

The commission expressed support in concept for several of the incremental plans but generally urged more study before any are implemented. Cowdry also summarized consultant and staff studies that question the efficacy of two more modest proposals to encourage more coverage.

Some, including Stephen J. Salamon, whose resignation as commission chairman became effective yesterday, proposed allowing insurers to use health status in setting premiums for Maryland small employers. Currently, rates are set based only on age and region of state. Supporters of the change said it would result in lower rates for small employers with young and healthy workers, encouraging them to buy coverage for the first time.

A consulting firm, the Lewin Group, projected that 42 percent of small employers would see premiums drop by 10 percent or more. But, the consultants advised, another 32 percent would see premiums rise by 10 percent or more. Employers with older and sicker workers would drop coverage, according to the projections, offsetting any gains among the young and healthy, and the number of uninsured would actually increase, they said.

Another proposal was to expand the small-employer market, now limited to companies with up to 50 workers, to companies with 75 or 100, spreading risk in the hopes of moderating premiums. But Mercer Human Resource Consulting estimated that employers with older and sicker workers would be more likely to join the expanded pool, increasing premiums for all employers by 2 percent to 5 percent.

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