The direction the state of Maryland wants to take in its health insurance program follows the same path taken by most of this nation's private-sector companies: it seeks to put economic pressure on state workers to abandon the costly but popular traditional health-insurance plans in favor of a cheaper set of managed-care options. The reason is strictly one of dollars and cents.
The Blue Cross preferred provider plan is a luxury in the frugal '90s, with state government picking up all medical expenses for enrolled workers and retirees except for a $10-per-visit payment and a $22-a-month premium for individuals and a $52 monthly premium for a family of three. No wonder nearly two-thirds of the eligible 87,000 state workers and pensioners are in this program. It's a real bargain for them.
But not for Maryland taxpayers. Financial support for such an inclusive, state-pays-all medical plan is costing them $301 million this year -- an increase of nearly $50 million from last year.
That's a massive burden for taxpayers, but it has mirrored the sharp rise in health-care insurance costs across the country. Maryland's expenses in this area have more than doubled in just five years. Something had to be done to slow these sharp increases in health-insurance costs.
The Schaefer administration wants to make the preferred provider plan less attractive to workers. It tried to raise premiums five-fold but retreated under harsh criticism. Now officials are revising that proposal and could eventually recommend higher and more numerous co-pay features and a deductible provision in an effort to persuade more state workers to go with one of seven less-costly health-insurance options offered by the government.
Private-sector companies have achieved substantial savings by opting for managed care, though many workers have trouble making the adjustment. Bell Atlantic Corp., for instance, saved $125 million in 1992 through managed care and kept the rise in its health-care costs to 5 percent that year compared with an annual rise of 20 percent during the 1980s. In the past 10 years, membership in health maintenance organizations has quadrupled to 41 million. The shift to managed care in this country is well under way.
It is understandable that state workers are infuriated by the Schaefer administration's attempts to change their health-care options. It is also understandable that legislators, seeking election-year support from state worker groups, would savage personnel officials for daring to rein-in health insurance costs. But responsible government officials have to act. Medical insurance expenses are spiraling out of control. There's a limit to what taxpayers are willing to pay to subsidize a diamond-studded health-care program for state workers.