State board offers $75 million for expansion of Medicaid coverage

March 02, 2007|By M. William Salganik | M. William Salganik,sun reporter

The board of the state's program to insure residents otherwise denied health coverage decided yesterday that it has $75 million more than it needs, and offered the money toward an expansion of Medicaid coverage.

The one-time payment could help finance an ambitious expansion of health coverage being considered by lawmakers. However, it wouldn't be nearly enough to pick up the estimated $400 million cost of the plan expected to come out of the House of Delegates.

The House is looking to pay for about half of that cost with a $1-a-pack increase in tobacco taxes. The Senate and Gov. Martin O'Malley have expressed support for covering more uninsured, but so far have opposed the tobacco tax increase this year, leaving the fate of the expansion in doubt.

The House plan, crafted by Del. Peter A. Hammen, chairman of the Health and Government Operations Committee, and strongly backed by Speaker Michael E. Busch, calls for expanding eligibility for Medicaid and the State Children's Health Insurance Program; premium subsidies to moderate-income people and to small businesses; and a requirement that higher-income uninsured buy coverage.

In all, the plan would extend coverage to an estimated 236,000 of the state's 780,000 uninsured.

Hammen said yesterday that his committee could vote on the bill as early as next week. Several details have to be worked out, though he said a tobacco tax increase would be included.

"The question is what can we agree to over the next couple of weeks; that will drive what kind of coverage we can offer," he said at a recent hearing. "We're up against the clock."

With the tobacco tax uncertain, Hammen has been seeking other sources of funds, including the reserves of the Maryland Health Insurance Plan (MHIP).

Richard Popper, MHIP executive director, said that as of June 30 the plan had reserves of $111.5 million. Reviews by actuaries and the Maryland Insurance Administration have determined that amount is much more than the plan needs in case of unanticipated claims, Popper said, allowing $75 million to be shifted to Medicaid.

MHIP provides insurance primarily to people who can't buy it in the regular insurance market because they are in poor health. It also covers some who lost employer-paid coverage, such as Bethlehem Steel retirees when the company went bankrupt.

The plan is primarily financed by an assessment of 0.81 percent on every hospital bill. It also charges premiums to those it insures.

Sun reporter Laura Smitherman contributed to this article.

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