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The nation's governors are caught between the crisis of growing numbers of uninsured residents and proposed federal health care solutions that could make a significant dent in their own battered budgets.
States received an indication this week of the price they might pay for health care overhaul. The Congressional Budget Office estimated state spending on Medicaid would increase by about $33 billion over a decade under a leading proposal set for a vote in the Senate Finance Committee next Tuesday.
The Senate plan and most other viable proposals in Congress include an expansion of eligibility for Medicaid, the insurance program for the poor and children, in which states pick up about half the costs.
That means about 150,000 additional Marylanders could receive full Medicaid benefits, according to preliminary estimates, at a potential cost to the state of tens of millions of dollars a year. About 700,000 are currently enrolled.
But Gov. Martin O'Malley has played down those costs, saying state spending on health care overall has risen at an unsustainable rate and could grow by another $3.6 billion over the next five years. The nation can't afford to do nothing, said O'Malley, who is emerging as a vocal cheerleader for federal efforts.
"It is utterly fiscally irresponsible to cling to the status quo," O'Malley said during a recent conference call organized by the Democratic National Committee to address concerns about expensive mandates being imposed on states.
But Republicans and some Democratic governors have expressed worries about what reform would mean for their bottom lines, and complained that the federal government shouldn't foist unfunded programs on recession-weary states facing unprecedented budget gaps.
If the proposals deliver on promised health care savings through reduced prescription drug prices and other mechanisms, Maryland could benefit - as it administers Medicaid and pays for health insurance coverage for tens of thousands of employees.
Meanwhile, the state faces structural deficits of $2 billion or more for several years, partly because of rising Medicaid spending. Federal stimulus funding that propped up Medicaid is running out.
"If I was a state legislator or a governor, I would be getting squeamish about the added costs," said Bradley Herring, assistant professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "At the same time, it might save states like Maryland some money."
The impact on states has been a sticking point as Congress debates the legislation.
O'Malley and more than 20 other Democratic governors sent a letter last week to congressional leaders, urging action. Republicans including former Gov. Robert L. Ehrlich Jr. have lined up in opposition, and some Democratic governors have said they cannot take on any new Medicaid responsibilities.
A look at the Medicaid program in Maryland is instructive.
In the past five years, the program's costs quickly escalated from $4 billion to $5.9 billion. During that time, the state wasn't able to afford all the components of a Medicaid expansion signed into law by O'Malley and approved by the General Assembly two years ago. Nonetheless, more than 47,000 residents were able to sign up - reducing the ranks of the uninsured.
Because Medicaid enrollment is counter-cyclical, the rolls swell during economic downturns, precisely when states have fewer resources to pay for the benefits.
Pollicymakers are bracing for the potential impact of new federal Medicaid requirements. State Sen. Thomas M. Middleton, a Democrat who is chairman of the Finance Committee, said he understands the federal government can't shoulder the entire cost, but the state is in fiscal trouble.
"I just don't see where the revenue is going to come from," he said.
The proposals being debated in Congress generally expand Medicaid eligibility to individuals with incomes up to 133 percent of poverty, or roughly $29,000 a year for a family of four. Maryland has expanded eligibility for parents up to 116 percent of poverty.
State analysts caution that many details remain in flux. They note that the number of people who actually enroll could be far lower than the total number eligible. The proposals in Congress also differ as to how much states would have to pay, and when.
Over the long term, state officials say, the federal proposals should reduce the rate at which health care costs rise.
In Maryland, one way that happens is by enrolling more people in Medicaid because otherwise the cost to treat them at hospitals is passed on through higher rates that are built into everyone's insurance premiums.
Maryland Health Secretary John M. Colmers said even if savings don't completely offset the added costs to states, the effort would be worthwhile. "In the end, you have a much better health system and much better health outcomes."
States received an indication this week of the price they might pay for health care overhaul. The Congressional Budget Office estimated state spending on Medicaid would increase by about $33 billion over a decade under a leading proposal set for a vote in the Senate Finance Committee next Tuesday.
The Senate plan and most other viable proposals in Congress include an expansion of eligibility for Medicaid, the insurance program for the poor and children, in which states pick up about half the costs.
That means about 150,000 additional Marylanders could receive full Medicaid benefits, according to preliminary estimates, at a potential cost to the state of tens of millions of dollars a year. About 700,000 are currently enrolled.
But Gov. Martin O'Malley has played down those costs, saying state spending on health care overall has risen at an unsustainable rate and could grow by another $3.6 billion over the next five years. The nation can't afford to do nothing, said O'Malley, who is emerging as a vocal cheerleader for federal efforts.
"It is utterly fiscally irresponsible to cling to the status quo," O'Malley said during a recent conference call organized by the Democratic National Committee to address concerns about expensive mandates being imposed on states.
But Republicans and some Democratic governors have expressed worries about what reform would mean for their bottom lines, and complained that the federal government shouldn't foist unfunded programs on recession-weary states facing unprecedented budget gaps.
If the proposals deliver on promised health care savings through reduced prescription drug prices and other mechanisms, Maryland could benefit - as it administers Medicaid and pays for health insurance coverage for tens of thousands of employees.
Meanwhile, the state faces structural deficits of $2 billion or more for several years, partly because of rising Medicaid spending. Federal stimulus funding that propped up Medicaid is running out.
"If I was a state legislator or a governor, I would be getting squeamish about the added costs," said Bradley Herring, assistant professor of health policy and management at the Johns Hopkins Bloomberg School of Public Health. "At the same time, it might save states like Maryland some money."
The impact on states has been a sticking point as Congress debates the legislation.
O'Malley and more than 20 other Democratic governors sent a letter last week to congressional leaders, urging action. Republicans including former Gov. Robert L. Ehrlich Jr. have lined up in opposition, and some Democratic governors have said they cannot take on any new Medicaid responsibilities.
A look at the Medicaid program in Maryland is instructive.
In the past five years, the program's costs quickly escalated from $4 billion to $5.9 billion. During that time, the state wasn't able to afford all the components of a Medicaid expansion signed into law by O'Malley and approved by the General Assembly two years ago. Nonetheless, more than 47,000 residents were able to sign up - reducing the ranks of the uninsured.
Because Medicaid enrollment is counter-cyclical, the rolls swell during economic downturns, precisely when states have fewer resources to pay for the benefits.
Pollicymakers are bracing for the potential impact of new federal Medicaid requirements. State Sen. Thomas M. Middleton, a Democrat who is chairman of the Finance Committee, said he understands the federal government can't shoulder the entire cost, but the state is in fiscal trouble.
"I just don't see where the revenue is going to come from," he said.
The proposals being debated in Congress generally expand Medicaid eligibility to individuals with incomes up to 133 percent of poverty, or roughly $29,000 a year for a family of four. Maryland has expanded eligibility for parents up to 116 percent of poverty.
State analysts caution that many details remain in flux. They note that the number of people who actually enroll could be far lower than the total number eligible. The proposals in Congress also differ as to how much states would have to pay, and when.
Over the long term, state officials say, the federal proposals should reduce the rate at which health care costs rise.
In Maryland, one way that happens is by enrolling more people in Medicaid because otherwise the cost to treat them at hospitals is passed on through higher rates that are built into everyone's insurance premiums.
Maryland Health Secretary John M. Colmers said even if savings don't completely offset the added costs to states, the effort would be worthwhile. "In the end, you have a much better health system and much better health outcomes."
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You don't say..$3.6 billion? Oh, did Gov. O'Malley increase medicare spending by $600 million in the 2007 Special Session. The same Special Session where O'Malley passed the largest tax hike in Maryland history? Oh, he did! I quote a big Martin O'Malley fan, Delegate Mannor: "We raise $600 million to implement major healthcare reform, including measures to expand Medicaid eligibility...providing coverage for 100,000 Marylanders."http://www.rogermanno.com/press/index.cfm?Fuseaction=pressreleases_full&ID=1132 Who voted for O'Malley? The guy increases taxes and spending in the same swoop and then complains that he faces deficits. It is like watching a teenager handed a credit card complaining that things cost money. I hope people vote in an adult next election who doesn't run their finances like Enron.
VeritatisCupitor (10/11/2009, 2:29 AM )