Governor announces details of his health care proposal

October 26, 2007|By Laura Smitherman | Laura Smitherman,Sun reporter

Gov. Martin O'Malley rolled out a health care plan yesterday that would expand medical coverage for uninsured residents and commit funding for data exchanges that connect the state's hospitals and allow them to share records.

More than 100,000 Marylanders would get coverage under the proposal out of nearly 800,000 residents who lack coverage. The plan would cost about $500 million, including $250 million in new state revenue plus federal matching dollars and funds redirected from other areas. It would be phased in over four years depending on availability of funding.

The General Assembly will consider the legislation during the special legislative session that begins Monday. O'Malley called the session to eliminate the state's $1.7 billion budget deficit for the fiscal year starting in July and to increase spending in some areas.

Addressing critics who question the wisdom of expanding programs in the face of the looming deficit, O'Malley stressed the plan's "pay-as-you-go" feature and said that residents who have private insurance would save money because the cost of treating the uninsured in Maryland is added to their premiums.

"Getting our fiscal house in order is really about making progress for the future," O'Malley said. "So this is something that not only affects the state's bottom line in terms of the costs that are laid out but it's also something that makes our state a better and stronger place."

He said his long-term goal remains universal coverage and called his plan a first step.

A similar proposal passed the House in the last session but died in the Senate, where President Thomas V. Mike Miller argued that implementing it without a solution to the state's fiscal woes would be irresponsible. Miller says he would support health care legislation during the special session if it doesn't add to the deficit.

But Republican lawmakers said they are still worried about the cost of the proposal and would prefer private-sector solutions.

"Our primary concern right now needs to be reducing the structural deficit and chronic overspending, and several hundred million dollars for a new social program is only going to exacerbate the problem," said Del. Christopher B. Shank, House minority whip from Western Maryland. "These are worthwhile goals, but we have to set priorities."

The proposal would extend Medicaid coverage to more Marylanders, provide subsidies to small businesses offering insurance to employees and direct $10 million to fund health care information technology aimed at improving care and saving money through efficiencies. O'Malley also signed an executive order yesterday creating the Health Quality and Cost Council to explore other initiatives.

The plan would expand Medicaid eligibility for adults from the current threshold - 40 percent of the federal poverty level - to 116 percent, or about $12,000 a year for an individual and nearly $24,000 a year for a family of four.

O'Malley announced his health care plan flanked by legislators as well as John M. Colmers, state health secretary; Sister Helen Amos, executive chairwoman of Mercy's Health Services board of trustees; and Penny Troutner, owner of Light Street Cycles in South Baltimore, who says she would benefit from the small-business subsidies.

"The rising cost of health care affects just about everyone I know, but boy, doesn't it really affect small businesses?" Troutner said. She said that there have been times her family, including two children, have been unable to afford insurance.

To encourage businesses to continue to offer insurance, the state would provide subsidies to small businesses with fewer than nine employees as well as to participating employees who earn less than $50,000 a year. The subsidies would be $1,000 or less, depending on how much they contribute to their plan's premium. Such subsidies would be available to small businesses that don't offer insurance if they enroll in a wellness program.

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