Buoyed by the midterm elections in which health care played a key role, lawmakers and advocates for the Affordable Care Act in Maryland say they will push a plan to require more people to get coverage.
The proposal is a response to congressional Republicans’ move to strip enforcement of the federal mandate to buy coverage beginning in the new year.
“The Trump administration has methodically taken steps to dismantle the ACA and all states will have to find a way to respond,” said state Sen. Brian Feldman, a Montgomery County Democrat who is sponsoring the legislation for a second time. “On balance, I think more people are realizing having health insurance is good from a financial standpoint.”
Under the plan, residents would have to pay a state penalty for going without coverage. But unlike under the federal mandate, uninsured residents could choose to use their fine as a down payment on a policy from the state health exchange.
The so-called individual mandate to buy coverage was among the least popular elements of the federal health law known as Obamacare, though supporters said it was crucial to ensure people bought insurance and enough healthy people enrolled.
About 12 million Americans bought plans this year, including about 150,000 in Maryland, and the Congressional Budget Office has estimated that 3 million might skip coverage next year without a penalty. So far during the open enrollment period that begin Nov. 1, sign-ups are down nationally from this time last year but up a bit in the state because more people are renewing policies, according to state exchange officials. New enrollments are flat or down slightly, they said.
State advocates for the health law fear a drop by the Dec. 15 enrollment deadline will mean higher future premiums, not only for exchange shoppers but also for people who get insurance through employers. People without coverage often seek expensive care in hospitals and any unpaid bills are passed on to all consumers. Since the law took effect five years ago, Maryland hospitals report slashing uncompensated care by $400 million, or about a third.
“Our ‘down-payment plan’ helps get the uninsured to contribute,” said State Del. Joseline Peña-Melnyk, a Prince George’s County Democrat, in a radio ad in support of the state mandate that begins airing Nov. 20. “They get the care they need while we shrink uncompensated care, holding down insurance costs for everyone.”
Maryland joins other states in exploring ways to cut health costs; only a few states such as Massachusetts and New Jersey have passed insurance mandates. Feldman said Maryland failed to pass a mandate during the 2018 General Assembly session because lawmakers didn’t have a good framework for sending tax information to the exchange so people could buy coverage or sign up for Medicaid, the government health plan for the poor.
Supporters are working on that before the 2019 session begins in January. Feldman also said the legislature had been focused on passing a reinsurance program to help insurance carriers pay for the most costly policy holders. The program is credited with prompting insurers to reduce premiums.
Under the proposed mandate, people would be asked on their state tax returns if they have health coverage and those answering no would pay about $700 or 2.5 percent of household income, whichever is higher, or they could choose to use the fine to buy an insurance policy.
The advocacy group Families USA devised the proposal and is backing it in other states. The group estimates that 78,000 uninsured people in Maryland could buy insurance for no more than the penalty plus federal subsidies; about 75 percent of Marylanders on the exchange qualify for some assistance. The group estimates another 50,000 uninsured could enroll in Medicaid.
Stan Dorn, a senior fellow at Families USA, said the down payment plan is as close to auto-enrolling people as is legally allowed. He said residents will have a “forced choice” on their annual tax form of paying the penalty or enrolling in coverage.
“We know there are all kinds of benefits people qualify for that they don’t enroll in,” he said, citing food stamps and 401(k) retirement accounts. “The hassle factor is incredibly important. With health insurance, healthy people don’t have the motivation to buy insurance, but they are the people we want in the market. The goal is to make it as easy as possible.”
Dorn said the group turned to states where lawmakers may be more receptive to steps to protect consumers and their insurance markets.
U.S. Rep. John Sarbanes, a Maryland Democrat, said federal lawmakers will seek to address high prescription drug costs and the opioid crisis but that state-level lawmakers might focus on protecting people with pre-existing conditions, ensure that plans have essential health benefits and strengthen oversight of the individual market.
A state commission plans to consider some of these and other measures. Feldman said it will look at merging the markets where individuals and small businesses buy coverage.
Vincent DeMarco, president of the Maryland Citizens’ Health Initiative, is supporting the state-level mandate with radio ads that also begin airing Tuesday.
“This will get a lot more people insured,” DeMarco said. “We would identify people eligible for Medicaid and get them insurance and tell people that the penalty along with their tax credits would get them full insurance. I think the vast majority will say yes.”
Still, the fate of the measure and others remains unclear. Gov. Larry Hogan, a Republican who supported the reinsurance measure, called the federal mandate punitive and a spokeswoman for him said he didn’t want to see a return to that specific measure.
“While we are always open to ideas to make healthcare more accessible and affordable for Marylanders, the governor favors incentives over penalties,” said Amelia Chassé, a spokeswoman for Hogan. “For example, by successfully enacting legislation and securing federal approval of Maryland's reinsurance waiver, premiums on the individual market are decreasing across the board for the first time in decades.”
Rep. Andy Harris, the lone Republican in the state’s congressional delegation, opposes any mandates.
“The solutions to unaffordable health insurance do not include another expensive government mandate — the solutions do include the creation of mechanisms like high-risk pools to make sure pre-existing conditions are covered affordably, price transparency of the cost of health care (including prescription drugs), allowing a variety of affordable health insurance alternatives and encouraging healthy lifestyles and wellness,” he said in a statement.
Jonathan P. Weiner, a Johns Hopkins University professor of health policy and management, said the state will need to take steps to protect the insurance market and said incentives typically gain more traction with lawmakers and the public than penalties.
One problem with the mandate proposal, however, is that premiums and out-of-pocket costs remain high for those who get little or no subsidy and some people will still find the insurance unaffordable.
“Incentives are always better psychologically and economically than disincentives,” Weiner said. “The latest estimate shows that several million people next year could drop insurance because there is no mandate, and I think most people agree those who do not buy insurance are healthy people. … This is a pretty neat idea to get people back into insurance.”