ANNAPOLIS – The House is set to vote today on a plan to tax health maintenance and managed care organizations to fund an expansion of health care for the poor.
The House Ways and Means Committee paved the way Wednesday for the bill, which would rescind a tax break for HMOs and similar plans, to go to the floor.
The revenue from a 1 percent premium tax will help expand Medicaid and bolster community health care centers to accommodate 40,000 of the state’s poorest uninsured, a plan developed by ranking lawmakers in both the House and Senate.
The act expands primary care through Medicaid, which now covers 531,000 people, 92,000 of whom are children in the MCHIP program. The bill would extend coverage to parents earning up to 200 percent of the poverty level ($37,700 for a family of four) and whose children are enrolled in the MCHIP program.
The bill will also tap federal matching funds and use $28 million from the annual Cigarette Restitution Fund payments to increase payments to Medicaid providers for the first time in 10 years, said Delegate John A. Hurson, D-Montgomery, the bill’s sponsor.
Low-income Marylanders, who don’t qualify for the expanded coverage, would be referred to community clinics, which will provide service on a sliding fee scale. A grant program will provide building and operating expenses for certain health centers.
The bill also establishes a partnership between hospitals and community care centers to reduce the number of non-emergency visits to hospital emergency rooms, which account for $26 million in uncompensated care each year, said Hurson.
Amendments to the bill provide incentives for specialists who offer services at community clinics. The bill also creates a task force on expanding access.
Opponents argue increased care would raise health care costs for everyone at a particularly bad time. But Hurson predicted the state’s major HMOs – CareFirst BlueCross BlueShield and MAMSI – would swallow costs or spread them out, rather than lose their market edge.
“It’s a competitive, dynamic marketplace and you can’t just assume that a cost going to a carrier is going to be rolled right back into that product,” Hurson said.
The administration disagrees, and it will be hard for Gov. Robert L. Ehrlich to support the bill.
“The HMO taxes are passed directly on to low- and middle-income Marylanders,” said Henry Fawell, an Ehrlich spokesman. Fawell said it was “overly optimistic to think the companies won’t pass the cost on to consumers,” and because of this, the governor is “not enthusiastic” about the tax.
Insurance company CareFirst has no stance on the bill, said William L. Jews, the company’s CEO and president.
“We certainly are concerned about the plight of uninsured and underinsured Marylanders and we applaud efforts to address the issue. We have taken no position on the bill and it is premature to determine the impact,” said Jews in a written statement.
As the program gears up in fiscal year 2005, it will cost about $9.5 million, increasing to $36 million in 2006, and $77 million when the program is fully enrolled with 40,000 people in 2007.
Each year, the program will generate a surplus that will be returned to the program for the next year.
A similar bill in the Senate, sponsored by Sen. Paula C. Hollinger, D-Baltimore County, and Sen. Thomas M. Middleton, D-Charles, is awaiting a vote in the Finance Committee.