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Health Care Viewed As Key Issue In 2008: Reform Could Be Linked To Budget Deficit Package

Copyright:The Baltimore Sun
Source:Baltimore Sun, The (KRT)

Apr. 16--The Maryland General Assembly adjourned without approving a multimillion-dollar plan to expand health care coverage to thousands of state residents, but the proposal remains on the table and the drumbeat for universal coverage is only expected to grow louder until lawmakers meet again.

The debate over how to help the growing number of uninsured, a costly dilemma that politicians across the nation are struggling to address, will once again butt up against Maryland's projected $1.5 billion budget shortfall in the next session. But lobbyists and lawmakers say the two issues could work in tandem, with health care as a sweetener in a potentially unpalatable tax package.

Just days after lawmakers departed Annapolis, the idea of a large legislative package is being floated. Such a package would close the budget gap and could include other programs that could be used to draw votes, including transportation funding, the legalization of slot machines and a revamping of the state's outmoded tax structure.

"It makes the sale of a tax package easier," said Sen. Thomas M. Middleton, a Charles County Democrat and chairman of the powerful Finance Committee, where the expansive health care proposal died this session. "It would be a whole lot less offensive for taxpayers if they know part of the funding is going to a health care expansion."

While the legislature did pass some health care legislation, including a measure requiring that insurers cover adults up to age 25 on their parents' policy, they did not approve an expansive proposal to bring more of the state's nearly 800,000 uninsured under Medicaid, the government insurance program for the poor. That plan, which passed the House of Delegates but not the Senate, is considered a blueprint for legislation in the next session.

The rising price of health care has made it a potent political topic, and the possible closure of Prince George's Hospital Center, which has suffered financially as it has cared for a large number of uninsured patients, has underscored the problem. Lawmakers and health care advocates say the number of Marylanders without health insurance could increase by 50,000 in the next year.

Laying groundwork

"What this session did was lay the foundation for a substantial health care expansion in Maryland, and I think that's going to happen the next time the Assembly meets," said Vincent DeMarco, president of the Maryland Citizens' Health Initiative, which has been lobbying for years on the issue. "The Prince George's County hospital disaster illustrates the need for health care coverage."

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Gov. Martin O'Malley, who made affordable health care a priority after taking office in January, said he would continue to work with state leaders on finding ways to expand medical coverage but stopped short of endorsing any specific plans for the next session.

"One of my bigger disappointments in the session is that we didn't do more," O'Malley said.

Sweeping health care proposals have been introduced in several state legislatures, including in Pennsylvania, Illinois and California, often running into cost concerns.

"There are a number of states that are going to have a very serious run at expanding coverage," said Ron Pollack, executive director of Families USA, an advocacy group. "This issue is being catapulted toward the top of the domestic agenda."

The debate mirrors one taking place in the nation's capital. Congress wants to expand the government-subsidized insurance program for children in lower-income families, while President Bush has proposed curtailing it as part of a budget-balancing plan.

In Maryland, the financial demands are staggering. In addition to the deficit, health care plans could require as much as $400 million a year in state funds and transportation needs could reach $600 million annually. Even if slots were approved, bringing in as much as $800 million a year in revenue, the amount of money that needs to be raised is significant.

'Gut check' needed

"It's going to take a lot of consensus-building," said Donald C. Fry, president of the Greater Baltimore Committee, a business group that lobbied for health care legislation. "And it's going to take some gut check on the part of elected officials to determine the level of funding that's needed, and whether they are willing to make that tough vote."

House Speaker Michael E. Busch said health care should take precedence as Maryland lawmakers face difficult choices on how to fund pressing issues. He expressed skepticism of a wide-ranging package, saying the logistics would be "daunting."

"The health care problem isn't going to go away; it will only become more of an issue with the average constituent," said Busch, a Democrat from Anne Arundel County. "It's just as pressing a problem as transportation, as our education system."

Busch pushed hard for a bill that would have extended Medicaid to more than 100,000 residents; it passed the House with broad support. The bill fell to opposition in the Senate, where Senate President Thomas V. Mike Miller took issue with the bill's main funding source, a doubling of the tobacco tax to $2 per pack of cigarettes.

Miller, a Democrat who represents Calvert and Prince George's counties, has warned colleagues that a painful budget-balancing process is imminent, and that lawmakers may need to return for a special session before next year. He has said the legislature would eventually address health care but that confronting the state's structural deficit is paramount and may require a number of solutions, including budget cuts, tax increases and slots.

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Even the tobacco tax remains an option. While O'Malley and Miller said the tax would be an inappropriate revenue stream for health care because it declines as fewer people smoke, lawmakers left open the possibility of raising it to shore up the general fund.

The main thrust of any health care fix is likely to be an expansion of Medicaid for adults; the state's program already covers children in families earning up to three times the poverty level ($20,650 a year for a family of four).

The failed House bill would have tripled the maximum allowable income for Medicaid coverage for adults to about $12,000 a year for individuals, or about 115 times the poverty level, at a cost of roughly $200 million a year in state funds.

Proposals, including one from O'Malley, to raise the eligibility threshold for children have met with concerns about the "crowding-out effect." That means people drop their employer-provided insurance programs to enroll their children in Medicaid, which requires participants to pay a sliding-scale premium at higher income levels that is typically cheaper than private insurance.

Health care bills

The legislature did pass several less-expansive bills on health care in the latest session.

One measure, also included in the O'Malley proposal, requires that private insurers and the health plan for state employees allow adults up to age 25 to stay on their parents' plan, and that insurance policies cover domestic partners and their children.

Other legislation authorizes health insurers to provide discounts to small employers that participate in wellness programs, including smoking cessation plans and nutrition education, and would encourage new types of insurance products for seasonal and part-time workers.

"I wouldn't look at the session as a complete loss for health care progress," said Ronald W. Wineholt, a lobbyist with the Maryland Chamber of Commerce who worked on health care legislation. "There were some small steps that were taken that I think will prove helpful."

Another bill calls for a study of so-called individual mandates, under which residents must obtain health insurance or face financial penalties, as well as employer mandates that would force businesses to provide health plans for workers.

Some of the proposals slated for study could be part of legislation in the next session, and are aimed at getting people insured who may not be eligible for Medicaid.

Lawmakers were surprised by the findings of past study groups. For instance, people who make more than four times the poverty rate, or about $80,000 for a family of four, comprise about 25 percent of the uninsured. Also, more than half of Maryland's uninsured are working adults. And those aged 19 to 29 are the least likely to have insurance coverage through an employer, with an uninsured rate of about 28 percent.

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"We'd like to see a multifaceted package that's not limited to a Medicaid expansion," said Nancy Fiedler, senior vice president of the Maryland Hospital Association. "We'd still like to go back and have the broader discussion."

Sun reporter Laura Barnhardt contributed to this article.


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