ANNAPOLIS – Health care advocates unveiled a plan that would provide health insurance to all Marylanders at a joint committee meeting Tuesday, but lawmakers cautioned it would be a tough sell in a weak economy.
The plan, which would cost the state $2.8 billion in the first year, and $15.5 billion over five years, would be primarily financed by a 2 percent payroll tax on all businesses, as well as increased cigarette and alcohol taxes.
“I’m hopeful we can make progress each year, but we have to be cognizant of the fiscal constraints,” said Sen. Robert Garagiola, D-Montgomery, who called the plan an ambitious solution to a complicated problem.
Garagiola said approval of the plan could depend on whether universal care would create savings or cost the state more money in the long run.
Some studies show universal coverage costs more in the long run because of added demand. Others suggest it actually saves money as more take advantage of less costly preventative services rather than expensive emergency care, Garagiola said.
An estimated 700,000 individuals are currently uninsured in Maryland.
Officials from the Maryland Citizens’ Health Initiative, a non-profit that developed the plan, said they could not provide data on long-term results but agreed to further research the topic for the committee.
The group – which has created a coalition of professors, economists and others interested in universal health care – is primarily concerned with making health care more affordable. They argued that their plan would allow more small businesses to offer competitive insurance plans, and therefore improve the business climate in the state.
“This plan is about prevention and keeping people healthy,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative.
Alexis Coates, CEO of the Baltimore-based software company dEVNIX Inc., said he may have to export jobs oversees since his company stopped offering health insurance last year when the cost became unmanageable. That is making it tough for him to recruit employees.
“If I can’t offer health care, I can’t compete in this market,” said Coates.
Lawmakers said they were concerned about increasing taxes on both individuals and businesses in light of an unsteady economy.
Delegate Donald Elliott, R-Carroll, said he feared significant taxes on alcohol and cigarettes would drive Marylanders to purchase products out of state.
Under the plan, cigarette taxes would increase from $2.00 a pack to $2.75.
Taxes on alcohol, some of which have remained unchanged since 1955, would also see large spikes. The tax on distilled spirits would jump from $1.50 per gallon to $10.03 per gallon.
Tuesday’s presentation served to introduce lawmakers to the intricacies of the health care plan. Delegate James W. Hubbard, D-Prince George’s, is expected to introduce the program as a bill in the next legislative session beginning in January, DeMarco said.