State's Health Costs Grow

Price Rises As Recession Draws More To Medicaid

July 02, 2009|By Sarah Fisher | Sarah Fisher,

A year into a new effort to expand health coverage, recession-weary Marylanders are flocking to the state's Medicaid program in numbers far greater than expected, costing the state $50 million more in the process.

As of this week, 44,255 additional state residents had enrolled in Maryland's Medicaid system after income limits were significantly relaxed, outpacing projections that enrollment would increase by 26,605.

Officials say the economic downturn has swelled the ranks of the unemployed, driving more people than expected into the public plan.

Still, health advocates are cheering the figures, saying the state is doing the right thing by expanding publicly funded healthcare to adults who have children.

The expansion has been a "godsend" to uninsured families, said John Folkemer, a deputy secretary at the state Department of Health and Mental Hygiene.

"It didn't surprise me that enrollment numbers are so high or that they exceeded expectations," state Del. Peter Hammen, a Baltimore Democrat who is head of a General Assembly committee that oversees health care. "Our [previous] coverage was just so low."

But increased enrollment has also enlarged the price tag. Analysts originally estimated that the expansion would cost $94.6 million in federal and state money yearly. Now the estimate has risen to $144.6 million, according to Tricia Roddy, director of Medicaid planning for the state health department.

While the federal government picks up half the cost, the higher expenses come as Maryland is battling severe budget shortfalls. State health spending has been propped up this year by a major influx of stimulus dollars.

Proponents had hoped to extend the public plan to adults without children this year, but the initiative was a victim of state budget constraints.

"Medicaid delivers very costly health care," said state Sen. Andy Harris, a medical doctor and Baltimore County Republican, who voted against the expansion. "It doesn't deliver efficiently."

Last July, Maryland expanded its public coverage by increasing Medicaid eligibility to adults with children whose household income was 116 percent of poverty, or $20,500 for two parents with one child.

Previously, the cutoff for parents was 40 percent of the poverty level, so the same family would have had to make less than $7,000 per year to be eligible.

Critics had long complained that Maryland, among the wealthiest states, could afford better health care for needy residents.

Maryland had previously ranked 44th in the nation in Medicaid eligibility for adults, according to Vincent DeMarco, President of the Maryland Citizens' Health Initiative, which lobbied for the plan.

Since the expansion - promoted over the past year through a public relations campaign that included appearances by Baltimore Ravens players - the state has moved to the 21st spot for eligibility, DeMarco said.

Officials acknowledge that the shaky economy has driven more families than expected into the program.

"When we did the projections, nobody was really anticipating there would be such an increase in unemployment," said Folkemer. "Now that that's happened, there have been more people coming to Medicaid than we previously thought."

After Angela Newman of Baltimore lost her job with the University System of Maryland last year, she also lost her health insurance.

"It's almost like being without food," she said. "If you don't have it, it's all you think about."

When she enrolled her two sons, ages 9 and 6, in a popular federal-state health care plan for children, she also learned she was eligible for Medicaid coverage herself.

"I felt whole again," she said. "You can't take care of your children unless you're healthy."

It's not just the unemployed who are taking advantage of the opportunity. Officials estimate that more than a quarter of new enrollees could be dropping private insurance to participate in Medicaid, based on national trends. It's a phenomenon known as "crowding out," which troubles critics of government-run health care programs.

Newman was among the 100 or so Marylanders who gathered for a forum Wednesday at the Patterson Theater in East Baltimore, where members of the state's congressional delegation briefed attendees on the unfolding health care debate in Washington.

U.S. Rep. John P. Sarbanes, a Baltimore County Democrat, said he supported a government-provided insurance option that is part of the Democratic health plan in the House.

"I'm real optimistic that once we make the transition, there will be savings," Sarbanes. "Where we are now is unsustainable."

By the numbers

A quick look at Maryland's Medicaid program:


Old limit on the annual income for a family of three to be eligible


New limit for family of three


Anticipated number of enrollees due to new income limits


Actual number of additional enrollees


Total Medicaid enrollees (all programs)


Estimated number of uninsured (2007)

Source: Maryland Department of Health and Mental Hygiene; Henry J. Kaiser Family Foundation

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