As Maryland lawmakers got to work on their 90-day legislative session, there was a crisis brewing. Not the budget crisis, which we heard about during the elections, have read about, and no doubt will continue to read about on a daily basis in the months to come. This crisis is the astronomical cost of health care, and the impact it's having on individuals and businesses in this state.

Health insurance premiums for many individuals and small businesses are increasing at a double-digit rate each year. Paying for health insurance for many families is almost the equivalent of carrying a second mortgage, costing $12,000 or more annually.

The impact of these general rate increases is compounded by laws that permit insurers to calculate rates based on the age of the policyholder, or in the case of policies issued to small businesses, on the average age of the employees in the business.

Because older people generally need more health care, it seems fair to charge them more. But in practical terms, if the average age of employees in a small business moves from one rating category, say 40-44, to the next age bracket, 45-49, rates may jump by 25 percent in addition to the yearly double-digit increase. For some individual health insurance policies, the variation between rating categories for the young, say 20-25, and the "near elderly," those between 55 and 65, can exceed 300 percent.

Getting old can be expensive. These rating practices, coupled with general cost increases, means that some businesses and individuals are paying 50 percent or more for health insurance than they were just two years ago.

If mortgage rates, food prices, utility bills or taxes went up at the same rate as health insurance, the public outcry would compel elected officials, or candidates for elected office, to at least talk about the pressing need to solve the problem.

Strangely, last year's election brought little in the way of debate or even attention to the issue. Yes, there was some campaign talk about expanding public programs for low-income, uninsured individuals, and that certainly is a critical, unmet need. But expanding public programs, which require scarce public dollars, seems an unlikely solution given the state budget picture. In fact, rising costs are causing states to cut back on existing public programs. Moreover, with costs soaring, each year those scarce dollars buy less and less health care, forcing higher and higher infusions of public cash to cover the same benefits. The math doesn't work for state budget planners looking to close, rather than expand, state budget deficits.

Uninsured workers

More to the point, expanding public programs to cover low-income individuals too "wealthy" for Medicaid is really a separate, and narrower issue than the more widespread cost crisis affecting the majority of the insurance-buying public. All the data show many of the uninsured have jobs. Many individuals and small-business employees would never qualify for even the most generous public assistance expansion programs that might be considered.

Clearly, the rising cost of health care is a broader problem than expanding low-income access, because it threatens to expand the class of the uninsured to the larger, middle class.

Outpatient costs

The first step in forging a solution to a problem is to understand its causes. Drug costs are usually cited as the biggest culprit driving premium increases, but some data show that the cost of outpatient hospitalization is now accounting for more of the increases than drug costs. Doctors complain their reimbursement from insurers is flat or even declining, while some health plans are showing solid gains in net income and stock value as a result of premium increases keeping ahead of medical inflation. Consumers want more regulation, including required benefits, but businesses claim that adds to premiums. It seems that even understanding the problem is a big challenge.

Solutions have been offered up, and they run the gamut from stripped-down benefit packages to tax credits for individuals to buy coverage, to "consumer choice" policies where employers make a defined contribution to a health care spending account and employees choose when, where and how much to spend.

The problem is that many of these solutions don't cut costs. They either cut benefits or shift costs to someone else. This highlights why it may be hard to achieve consensus on a solution without first achieving a consensus on the problem.

Decrease in mandates

One bright spot: The Sun reported this month that newly elected House Speaker Michael E. Busch will push reforms to decrease the number of insurance benefits required by state law and lower the "affordability cap" that state law mandates for small-business policies. These proposals are a good sign the issue is reaching the radar screen of elected officials. But they don't provide a cure-all, even if the political opposition to reducing benefits can be overcome.

Cutting benefits may result in only temporary dips in premiums if underlying cost drivers haven't been effectively dealt with in the process. For example, repealing the requirement that insurers cover in-vitro fertilization for childless couples may have little long-term impact on premiums if drug costs or outpatient hospital costs continue to grow at double-digit rates.

State commission

What to do? Of course, Marylanders are not alone in this crisis, and one might argue it's a national problem requiring congressional solutions. We could add this to the growing list of "national" health care solutions that have not been enacted: a federal Medicare drug program, a federal patient bill of rights, and federal mental health parity, to name a few. While control of Congress and the White House by one party may increase the odds of something happening, history suggests the states should not stand idly by waiting for a federal solution.

Under the circumstances, Maryland should do what governments do to solve such intractable problems: form a commission. With a limited life (perhaps to report back by January next year), a modest budget, and a cross section of problem solvers as its members, the commission could perform two critical functions: gather data so policy-makers next year will have a solid factual foundation to make decisions, and suggest and analyze alternatives based on the facts gathered.

But whether or not a commission is the best alternative, the important thing is to get our state policy-makers talking and thinking about the "other" crisis, the health care crisis.

Steven B. Larsen is the Maryland insurance commissioner.