ANNAPOLIS – A Senate committee will vote today on a proposal to expand access to health care, amid fears the bill will become another unfunded Thornton-style mandate.
Varying interests spawned Senate amendments altering funding and coverage, bringing increased taxes for insurers and broader insurance for eligible patients.
On Friday, a subgroup of the Senate Finance Committee reworked the bill, reducing the number of people covered under the proposed Medicaid expansion, but making coverage more comprehensive.
Originally, the bill provided only primary care for an additional 200,000 people. Now, it provides full care — including hospitalization and specialties — for 76,000 people.
If passed, the bill will bolster community health clinics to support the Medicaid growth, as well as increase rates paid to Medicaid health care providers.
The committee plans to double a proposed tax on health maintenance organizations, eliminating the entire 2 percent tax break now given to the companies and raising approximately $100 million by the time the program is in full swing in 2008.
The HMO tax exemption has been contentious, and sponsor Delegate John A. Hurson, D-Montgomery, had tried to keep the tax at 1 percent to appease an anti-tax administration.
Even so, he had not managed to get Gov. Ehrlich’s support, and recently held Lt. Gov. Michael Steele’s business legislation hostage in committee to gain influence with the governor.
The committee refused to dedicate a $28 million windfall from the Cigarette Restitution Fund to health care, saying the increased HMO tax will pick up the slack.
Despite revamped funding with federal matching contributions, opponents’ main concern was cost.
“This is a very, very expensive, comprehensive step forward with no solid funding,” said Ellen Valentino, of the National Federation of Independent Business.
“I think it’s important they hear that this is a Thornton-health-care-type proposal at a very bad time,” said Valentino, referring to the $1.3 billion Thornton school reform plan passed in 2002, which has yet to be fully funded.
Opponents urged the committee to revisit the HMO funding source.
“MAMSI will pass this cost on to employers,” said D. Robert Enten, spokesman for MAMSI, one of Maryland’s largest health insurers. “One of the consequences of increasing the cost of HMOs is people will switch from HMOs to PPOs (preferred provider organizations). You need to consider the stability of the funding source.”
But proponents say the tax loophole was only put in to help more affordable HMO plans to get a foot in the market.
Health insurance plans have enjoyed a free ride and are now viable in the industry, making the tax exemption no longer necessary, said Glenn E. Schneider, executive director of the Maryland Citizens’ Health Initiative.
The new version of the bill could be even more effective at reducing uncompensated costs that result from uninsured patients, said Pegeen Townsend, of the Maryland Hospital Association. The bill would reduce the number of uninsured patients who generally use emergency rooms for primary care, and would trim uncompensated specialty care in hospitals, Townsend said.
Hurson told the committee Thursday he was comfortable with the Senate’s approach and hoped to work differences out in a conference committee. He could not be reached for comment Friday. – 30- CNS-4-9-04