A state commission gave preliminary approval yesterday to a health-benefits plan that is expected to become the standard for small employers across Maryland.
In a unanimous vote, the state's Health Care Access and Cost Commission endorsed a plan offering a level of coverage that falls between Cadillac and bare-bones policies.
It is part of a broader state reform effort designed to make health insurance more available and affordable to small businesses.
Under a new state law, insurers will be required to offer small businesses a standardized package of health insurance benefits starting July 1, 1994.
What the commission tentatively decided yesterday was the benefits the package will include.
The commission's plan focuses largely on preventive medicine and catastrophic illness.
Coverage includes unlimited hospitalization, mammography screening, child-wellness visits, out- patient lab and diagnostic services, family planning and prescription drugs.
The plan will represent the minimum health coverage that insurance companies can offer small businesses in Maryland.
Small businesses would not have to buy it for their workers. But commission members said they expect that many will, eventually providing coverage for many of the state's 600,000 uninsured.
After a 45-day public comment period early next year, the commission is expected to give final approval to the plan in March.
Before voting yesterday, the commission made compromises with some of the many interest groups that have commented on the plan in recent months.
Following complaints from the Maryland Hospital Association about a $50 co-payment for emergency room visits, the commission reduced the fee to $35.
A patient's mother complained that the plan wouldn't cover her son's bone-marrow transplant. Now it will.
One group that conspicuously failed to win a compromise was Maryland Right to Life, which had asked the commission to eliminate coverage for abortion.
The debate over the Maryland plan has served as a miniature preview of sorts for the national dialogue expected over the Clinton health care reform effort.
A federal law -- if enacted -- could eventually supplant the Maryland law. But in the meantime, the state's small business insurance plan will remain in effect.
The Maryland reform is based on at least two concepts. As insurers offer the same basic plan, businesses ought to find it easier to shop for the best insurance. Market competition should also drive prices down.
In addition, companies will no longer be able to base premiums on the health of people in a single firm but on the experience of all small employers.
This safety-in-numbers element also is aimed at lowering prices for small businesses, many of which have not been able to afford insurance in the past.
"It spreads the risk, which is what insurance was intended to do in the first place," said William C. Richardson, the commission chairman.
How all this will play out in the real market place remains to be seen.
The commission estimates that coverage for a family will cost an average of about $3,995 a year. The average premium on an individual plan is expected to run $1,712.
Many businesses, however, are withholding final judgment until insurance companies submit the actual rates to the state in the spring.
"They really can't make a decision until they see what their carrier is offering them," said W. Miles Cole, business affairs director for the Maryland Chamber of Commerce.
So far, some small business owners have given the reform effort cautious approval. They particularly like the part of the law that prohibits insurance companies from excluding people with pre-existing medical problems such as cancer.
Small businesses tell horror stories about employees who can't get insurance because of their current health problems.
Some business owners think they might also pay cheaper rates under the new plan.
Lou Boulmetis and his wife, Judy, run Hippodrome Hatters in Baltimore. They have no employees and pay about $4,440 for their health insurance through an HMO. They say the commission's plan, similar in benefits, could save them perhaps $400 a year.
"It sounds just fine because I'm not losing anything I have right now," Mr. Boulmetis said.
Paula Kreuzburg, president of the Restaurant Association of Maryland, was less enthusiastic.
She said that the estimated costs are comparable to a plan that she now offers workers at her restaurant, Mrs. K's Toll House in Silver Spring. Most of her employees, however, don't buy it.
She does not expect her uninsured workers or many others in the restaurant business to buy the new plan. The problem, she says, is cost and attitude.
Many restaurant employees are young and start off earning minimum wage.
Restaurants can't help much, because they are labor intensive operations with low profit margins.
"I still can't afford to pay for it," she said of the new plan. "I can't put a medical surtax on my menu."
HIGHLIGHTS OF THE PLAN
Starting July 1, 1994, insurers will be required to offer Maryland's small businesses a health insurance plan for their workers. Though businesses will not have to buy it, premiums will be set using a pricing technique designed to make it more affordable. A state commission gave preliminary approval to the plan yesterday. Here are highlights of what it would cover:
* Unlimited hospitalization.
* Emergency room services, with a $35 co-payment per visit if the patient is not admitted.
* Hospice care.
* Pregnancy and maternity services, including abortion.
* Family planning.
* 25 in-patient days for mental health and substance abuse.
* Prescription drugs, with a $150 deductible and a co-payment of up to $15 per prescription.
* Bone-marrow, cornea, kidney and heart transplants.
* Child-wellness visits up to the age of 2 with a $10 co-payment.