Legislators seek to expand health care

State panel looks for new revenue sources to balance budget and meet key needs

May 30, 2007|By Andrew A. Green | Andrew A. Green,Sun reporter

Maryland needs to raise substantial new revenues to expand health insurance coverage as it identifies ways to close next year's projected $1.5 billion state budget shortfall, leading lawmakers said yesterday.

After failed efforts during this year's General Assembly session to reduce the number of Marylanders without health insurance - about 780,000 - a joint committee of state senators and delegates is pushing to develop a consensus behind a health care expansion within the next four months.

At the group's first meeting, the co-chairmen, Sen. Robert J. Garagiola and Del. Dan K. Morhaim, said they believe the state must establish a health care fund as part of its budget balancing, either during a special session this year or when the legislature reconvenes in January. "We're probably going to get one bite at the apple as far as looking for revenue to close the budget gap," said Garagiola, a Montgomery County Democrat.

State budget analysts have said they expect a gap between revenues and expenditures of as much as $1.5 billion next year, a shortfall that must by law be closed. Gov. Martin O'Malley and other state government leaders have said they aim to resolve the budget problems with a combination of cuts and new revenue sources, including higher taxes and possibly slot machines.

But the discussion at yesterday's meeting of the Joint Committee on Health Care Delivery and Financing signaled the pressure lawmakers may face to raise revenue for expanded services such as health coverage and transportation. O'Malley has not taken a position on whether a health care fund should be part of the budget package.

Dr. Rex Cowdry, executive director of the Maryland Health Care Commission, said at the hearing that covering all of the uninsured in the state would cost more than $2 billion a year. Some of that could be offset if the state found a way to recoup savings from reducing uncompensated care, expenses now borne by those who have insurance at an annual cost of $1.8 billion, or $1,100 a family, Cowdry said.

In Maryland, hospitals set their rates for patients who have insurance, or who can pay out of pocket for their care, high enough to cover the costs of indigent patients. The unique system provides the state benefits under Medicaid, but it means that all those with insurance pay more to cover the costs for those who lack it.

Cowdry said that not all of the cost of uncompensated care can be subtracted from the expense of expanding coverage because people, once insured, are likely to go to the doctor more.

"Covering the uninsured will require new dollars," Cowdry said. "Being insured leads to more care. We believe it's better care and better coordinated care, but is more care nonetheless."

Advocacy groups made a major push to reduce the state's uninsured population at this year's legislative session, culminating in the House of Delegates' passage of a Medicaid expansion bill funded by a $1-a-pack tobacco tax increase. The Senate rejected the idea.

Vincent DeMarco, the director of the Maryland Citizens Health Initiative and one of the leaders of the Medicaid expansion effort, said he was encouraged by the legislators' idea of using new revenue both to balance the budget and create a health care fund. He said increasing the tobacco tax for health care would be the best option, because it would raise nearly $200 million initially and discourage smoking.

"We think it's the smartest way to put money in this fund," DeMarco said.

The first round of the committee's discussion underscored the complexity of trying to expand health coverage.

Laura Tobler, an analyst with the National Conference of State Legislatures, testified yesterday that few states have succeeded in passing anything like universal health care. Massachusetts, the most recent state to enact such a plan, is finding implementation to be difficult, she said.

One of the most common ideas expressed by the lobbyists, experts and advocates who testified yesterday was increasing the Medicaid income-eligibility limit for adults, an attractive option because the federal government matches Maryland's Medicaid spending dollar for dollar. Maryland's income limit for adult Medicaid eligibility - $4,200 a year for a single person - is lower than that in many other states.

Morhaim, a Baltimore County Democrat who is a physician, said a real solution will require a combination of approaches, including efforts to reduce administrative costs, cut down on waste and improve care for chronic illnesses.

"Short of a single-payer, universal system, and that has its own challenges, there is no quick fix," he said.


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