O'Malley Signs Legislation To Increase Taxes, Expand Medicaid Eligibility

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Maryland Gov. MartinO'Malley (D) on Monday signed into law legislation that will increase taxes by$1.4 billion and expand Medicaid eligibility, the WashingtonPost reports(Wagner, WashingtonPost, 11/20).

Earlier in the day, the Maryland General Assembly approved the legislation,which will expand Medicaid coverage to more than 100,000 residents in fiveyears and offer subsidies to as many as 37,000 small businesses to offset thecost of providing coverage to employees, according to the Baltimore Sun. The legislation increases the state'sMedicaid income eligibility threshold for adults from 40% of the federalpoverty level to 116%.

The measure also provides $30 million in annual subsidies for small businesseswith fewer than 10 workers and their employees. The subsidies will be contingenton the company offering a wellness benefit.

The expansion eventually will cost more than $600 million annually, including$250 million in state funds and federal matching money. Legislators on Sundayagreed to add language to the bill stating that the expansion would occur onlyif voters approve a constitutional amendment on the November 2008 ballot thatwould legalize slot machines. Revenue from slot machines likely will help fundthe expansion. The bill includes language that caps enrollment for childlessadults if the program lacks funding (Smitherman, Baltimore Sun, 11/19).

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The bill also includes a $1 per pack increase in the cigarette tax, as well asincreases to personal and corporate income taxes (Washington Post,11/20). In addition, $77 million will be transferred from theemployee-sponsored health insurance fund to cover operating costs (AP/WashingtonTimes graphic, 11/20). The changes will take effect Jan. 1, 2008 (WashingtonPost, 11/20).

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O'Malley said, "Notonly were we able to restore fiscal responsibility so we can present historicinvestments in education and health care, but we were able to do that in a waythat is a lot fairer." However, some tax experts say the tax changes willdisproportionately affect low-income families, especially those who smoke(Rucker/Wiggins, Washington Post, 11/20).

Reprintedwith permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign upfor email delivery at kaisernetwork.org/email . The Kaiser Daily Health PolicyReport is published for kaisernetwork.org, a free service of The Henry J.Kaiser Family Foundation.

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