Health care that's working

Md. plan is covering more of the sick other exclude

March 25, 2007|By M. William Salganik | M. William Salganik,Sun Reporter

Most health insurers like to enroll healthy people, so they can be confident that premiums paid will exceed medical claims. Maryland Health Insurance Plan enrolls mostly sick people - those who get turned down by private insurers.

Most health insurers raise premiums and reduce benefits. MHIP has been reducing premiums and raising benefits.

Across the country, politicians and policy wonks have been talking about how to cover more of the uninsured. MHIP is actually doing it. Membership, now just over 10,000, has jumped 40 percent in the past year and has doubled in the past two years, creating new concerns as its board works to sustain the growth.

While MHIP has succeeded in covering more of the state's most vulnerable citizens, its potential for reaching large numbers of the state's 780,000 uninsured is limited because only a fraction are eligible for the state-subsidized program. Richard Popper, MHIP's executive director, estimates that perhaps 40,000 state residents have conditions that bar them from getting affordable private health insurance, assuming they can get it at all.

Still, MHIP's funding mechanism, an assessment on hospital bills, could offer a possible template for other efforts to cover the uninsured. Del. James W. Hubbard, a Prince George's County delegate who has sponsored a number of coverage expansion bills, said lawmakers will explore that possibility over the next year.

It was the hospital assessment that enabled MHIP's rapid growth, which is remarkable compared with other high-risk health insurance pools. The locked-in funding funneled tens of millions of dollars into its reserves in the program's first years when enrollment was low. The financial cushion allowed MHIP to cut premiums and improve benefits as it actively sought more members.

"Maryland is off-the-charts unusual in that it made affirmative efforts at outreach. Most other high-risk pools hide," said Karen Pollitz, who was an MHIP board member until last summer and studies high-risk pools at the Institute for Health Care Research and Policy at Georgetown University. Nationally, membership in high-risk pools has been flat for the past several years, Pollitz said.

One of those drawn in by outreach efforts in the past two years was Colleen Smith, 26, who operates a day care business at her home in Ellicott City. She said she had been denied coverage by CareFirst BlueCross BlueShield because of a not-precisely-diagnosed medical condition she described as "girl problems" and because of her weight.

"I was getting medical care, but it was, like, breaking the bank," said Smith, who makes less than $20,000 a year. "I'm working full-time and going to school full-time, and I had no savings."

With MHIP's low-income subsidy, she pays $132 a month (compared with $182 that MHIP charges higher-income people her age, a savings of $600 a year for her).

"It has been amazing," she said. "It has allowed me to actually see doctors and work on making my health conditions better," including a specialist for her health and a dietitian for her weight.

Indeed, MHIP's sense of mission was even evident at a legislative hearing in Annapolis last month.

After Tobi Dradczyk, of Walkersville, described her anxiety over being uninsured after being diagnosed with gestational diabetes, Popper rushed to catch her in the hallway to get her name and address so he could send her an application.

But success has created its own set of issues for MHIP's board: How can it afford to keep adding members with costly medical needs? How can it best employ its reserves? Should its focus be limited just to the hard-to-insure, or should it consider using its funds to widen coverage for all state residents?

In the wake of a surge in new members like Colleen Smith, MHIP's board voted this month to bump up premiums for next year, and add a two-month restriction on covering pre-existing conditions for new members. Those changes were opposed by the board's two consumer representatives, but the board majority wanted to make sure the program's costs wouldn't exceed its funding from an assessment on hospital bills in the state.

Popper said the board wants the coverage to be affordable, but not so low-cost that it creates a so-called "crowd-out" effect, discouraging employers from offering, or individuals from signing up, for employer-provided coverage.

"I use the Home Depot analogy," Popper said. "There are cracks in the system, and MHIP is the caulk to fill the cracks. But you don't want to overcaulk."

At the same meeting the board voted to turn over $75 million in surplus, built up in earlier years when enrollment was low, to the state to help finance an expansion of Medicaid insurance for low-income adults.

"We could have covered 2,000 additional individuals for two or three years," by spending down the surplus, Popper said. "Or we could get federal matching funds and cover 50,000 people in the Medicaid program."

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