Health care reform won’t bankrupt Maryland

April 19, 2010

Marc Kilmer's op-ed piece ("Health reform's painful pinch for Md.," April 14) criticized Maryland's health care coverage initiative and the new federal health care reform law for worsening the state's budget deficit. True enough, health care is not cheap, but let's look at what it really costs and how the state is paying for the initiative (which Mr. Kilmer neglected to do).

In 2007, Maryland's Medicaid program had one of the lowest income eligibility thresholds in the country — a family of three needed to have annual income below about $7,000 to qualify. A childless adult who was not permanently disabled would not qualify for any benefits other than primary care and prescription drugs. What happened when one of these low income individuals without health care coverage got sick? Lacking access to a primary care physician, they went to the closest hospital emergency room for care. Who paid for care in this expensive setting? All of us, through our own health insurance. Families USA estimated that in Maryland, the increase in premium due to health care for the uninsured was $332 for an individual policy and $948 for a family policy.

Knowing that Maryland taxpayers were already paying for health care for the uninsured, Gov. Martin O'Malley and the General Assembly devised an innovative way to expand Medicaid coverage with minimal impact on the state budget. The money built into hospital rates to provide episodic care to the uninsured was redirected to pay for comprehensive Medicaid coverage for families up to 116 percent of the poverty level (just under $20,000 for a family of three). Through this innovative funding mechanism, not a penny of state general funds has been spent thus far for the Medicaid expansion. And more Maryland residents have access to primary and preventive care, so that they no longer need to ignore health issues until a trip to the emergency room becomes unavoidable.

While Medicaid enrollment has indeed climbed, the Department of Legislative Services notes that enrollment growth has been evenly fueled by the expansion to higher income families and the economy. In the current fiscal year, the expansion has become less of a factor than the economy. As in previous economic downturns, Medicaid has been the safety net for families who have lost their private health insurance.

The federal health care reform law will expand Medicaid even further, allowing families with income up to 133 percent of the poverty level (about $25,000 for a family of three) to have access to health care coverage. Moreover, childless adults, who now have a stripped-down Medicaid benefit package, will have comprehensive coverage. The Department of Legislative Services projects that the state will actually save money in the first three years of federal health care reform, and additional state expenditures beginning in fiscal year 2017 could be offset by savings in hospital uncompensated care, the possible elimination of the state-subsidized Maryland Health Insurance Plan for the medically uninsurable, a higher federal match for the Maryland Children's Health Program, and additional rebates from pharmaceutical manufacturers. And, most importantly, approximately 133,000 low income Maryland residents will gain access to comprehensive health care; thousands more will obtain coverage through private insurance.

To guide and coordinate the state's efforts to respond to the federal health care reform law, Governor O'Malley established the Maryland Health Care Reform Coordinating Council. The council is not a new bureaucracy looking for new ways to spend taxpayers' money, as Mr. Kilmer would have us believe, but a council of existing state officials with support from the staff in the executive and legislative branches of government. The council will be working diligently to analyze the new law and determine what statutory, regulatory, and budgetary changes are needed moving forward. To quote from the executive order establishing the council: "Maryland is a national leader in health care, recognized for its policies to provide its residents with access to affordable and quality health care." I am confident that our leadership in this area will sustain our efforts to make health care accessible to all Maryland residents in a fiscally prudent manner.

Peter A. Hammen, Annapolis

The writer is chairman of the House of Delegates Health and Government Operations Committee.

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