Maryland To Consider Expansion Of Medicaid Eligibility

Maryland Gov. Martin O'Malley (D) on Thursday announced a proposalto increase eligibility for Medicaid and subsidize small businessesthat provide health insurance to their employees, the Washington Post reports. The General Assembly will consider the proposal during a special session on the budget that starts Monday (Rein, Washington Post, 10/26).

Theproposal would expand coverage to an additional 100,000 Marylandresidents, out of the 800,000 state residents who are uninsured. Underthe proposal, the state would expand the Medicaid income threshold foradults from 40% of the federal poverty level to 116% of the povertylevel (Smitherman, Baltimore Sun,10/26). The increase would occur over four years, with Medicaid firstextending the higher income eligibility level to parents, and later tochildless adults.

In addition, the proposal would giveinsurance subsidies to employees with annual incomes up to $50,000 whowork at companies that have as many as nine employees and do not offerhealth benefits (Washington Post, 10/26). The subsidieswould be up to $1,000, depending on the amount employees contribute totheir insurance premiums (Baltimore Sun, 26). The statealso would provide subsidies to about 4,000 small businesses in thestate to encourage them to continue offering employee health benefits.Employees with chronic illnesses would be eligible for discounts ontheir deductibles if they enroll in wellness programs under the plan (Washington Post, 10/26).

Theproposal also would allot $10 million to improve the quality of healthcare technology used statewide, which is intended to improve care andsave money by reducing inefficiency. In addition, O'Malley on Thursdaysigned an executive order to create the Health Quality and Cost Councilto explore other health initiatives (Baltimore Sun, 10/26).

Cost

The proposal is expected to cost $85 million in state general funds infiscal year 2009. Costs would increase to $188 million in 2010, $216million in 2011 and $250 million in 2012 (Witte, Washington Times,10/26). Total annual cost of the program is estimated at $675 million,including federal matching funds, according to Health Secretary JohnColmers (Washington Post, 10/26). Implementation of the plan will depend on the availability of funding (Washington Times, 10/26).

Thestate would fund the proposal through a $1-per-pack increase in thecigarette tax and a "reshuffling" of the state's method of reimbursinghospitals for providing charity care, according to the Post (Washington Post,10/26). In addition, about $75 million of a $100 million surplus in theMaryland Health Insurance Program would be used to fund the Medicaidexpansion (Washington Times, 10/26).

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