Howard County's fledgling health access plan for the uninsured could change into a regional nonprofit health insurance co-op for limited-income working families, the plan's chief architect said.
Under the recently passed federal law that requires everyone to have health insurance by 2014, Healthy Howard cannot survive in its current form, its creator, Dr. Peter L. Beilenson, said last week..
That is because the innovative health access plan for Howard County residents is not insurance, and it relies heavily on doctors and hospitals providing free care, he said.
"Healthy Howard will cease to exist," he said.
But the need for lower-priced insurance will not fade for families who cannot afford standard insurance even with federal subsidies, and earn too much to qualify for Medicaid, Beilenson said. Their incomes fall between 133 percent and 400 percent of the federal poverty level, or from $27,226 to $88,200 a year for a family of four.
However, the new law provides for insurance co-ops, suggested by U.S. Sen. Kent Conrad, a North Dakota Democrat, during the health care debate, and includes $6 billion in potential federal funding for them.
That is leading Beilenson to envision Healthy Howard turning into an insurance co-op and expanding to serve Central Maryland. It could fill that niche for lower-priced insurance and continue using its cost-containing elements, some of which focus on preventive care.
Others see an expanded future for it as well.
A co-op is owned by the participants and operated for their benefit, and its profits are rolled back into the company – for example, used to lower premiums or other costs. Conrad used the example of agricultural co-ops in his home state for the idea, but co-ops also exist as mutual insurance companies and credit unions.
Health policy experts from both the right and left have said the idea is intriguing but are wary because federal regulations have not been written yet.
One potential problem, said Sen. Benjamin L. Cardin, is that the law gives preference to nonprofit co-ops that operate statewide, not regionally.
"The concept of this federal program was to add another layer of competition and choice," after the proposed public option was dropped, the Maryland Democrat said. Still, an expanded, changed version of Healthy Howard "could very well try to qualify," Cardin added. "He's looking at the right part of the population."
Health access plans like Healthy Howard serve about 200,000 people across the country, and a co-op "would be a very exciting model" for them, said Karen Davis, president of the Commonweath Fund, a private New York group that promotes better health care nationally. She said a co-op has an advantage because there are no big CEO salaries or bonuses.
"I think it makes a lot of sense," she said.
But, she noted, sometimes doctors object, and obstacles can be hard to overcome.
Edmund F. Haislmaier, a senior research fellow for health policy studies at the conservative Heritage Foundation, said although "it is conceivable that someone might want to do that," he's skeptical that the concept will remain attractive once the federal regulations are written. He believes that the regulations will promote a consolidation of insurance companies that will end with two or three large providers in Maryland. But others are more enthusiastic about the concept.
"Healthy Howard seems to be the most logical organization to do it for the state of Maryland," said Brad Herring, a health economist and insurance expert at the Johns Hopkins Bloomberg School of Public Health. Herring said he'd help study the possible conversion, if requested.
"Many people are opposed to the notion of for-profit health care," he said.
If Healthy Howard's board approves, Beilenson, who is Howard County's health officer, said he'd organize a six-month study to explore using federal law to create an entity that could serve Central Maryland, including Baltimore City and Baltimore County, along with Anne Arundel and Howard counties.
Howard County has spent $1 million on the program, which began enrolling patients in the fall of 2008, and Howard County Executive Ken Ulman said his fondest hope "from day one" was that "the federal government would put us out of business." He said he presumes a co-op would not involve county funding.
Healthy Howard has about 600 enrollees, Beilenson said. Another 180 received health care through it but have left the program as their circumstances have changed, he said. Enrollment is a far cry from predictions of 2,000 enrollees in the first year.
Jonathan P. Weiner, professor of health policy and management at Hopkins' Bloomberg School, said how the new law will play out is unclear, as are potential changes in programs. For example, in the past, some co-ops developed into not-for-profit Blue Cross plans and regional health maintenance organizations.
Vincent DeMarco, president of the Maryland Citizens Health Initiative, said his group is just beginning to work with a committee set up by Gov. Martin O'Malley to consider the new law's implications for the state.
"We're all at the ground floor now. We're very much open to ideas like Peter's," he said.