RECENT REPORTS have placed an emphasis on budget cuts to the Maryland Children's Health Program (MCHP), with concern expressed that children will lose the health care coverage they have through this valuable state program.
Despite these cries to the contrary, Maryland is not eliminating health insurance coverage for any child currently enrolled in this program. Instead, as required by the legislature and a serious financial crisis, enrollment is closed for children in higher-income families.
MCHP is a Medicaid-like program that provides preventive health care and needed treatment and protects families against the potentially devastating medical costs of catastrophic events. Children who live in low- and moderate-income families in which the earnings are too high to be eligible for Medicaid are eligible for MCHP. This taxpayer-funded benefit package is richer than anything offered by private insurers.
As one part of a broad strategy to contain spiraling costs in the Maryland Medicaid program, the state requires some parents to pay a $37 monthly premium to gain or continue coverage for their children. The $37 covers all the children up to age 19 in a family and amounts to about 1.5 percent of annual income.
This is a great value, even for low-income families. It is far less expensive than the private market.
The media have stated that children will lose coverage. No one disputes the fact that some parents will choose to drop coverage for their children when faced with the new premium. Since MCHP participation is voluntary, the decision is up to parents.
While it is difficult to speculate why parents would choose to drop coverage for their children, one would surmise that they believe the coverage is not worth the monthly cost. The income bracket for those expected to pay the $37 premium, based on a family of four, is $34,040 to $36,800 a year. I believe it is entirely appropriate to expect parents in this income bracket to contribute to the costs of providing health insurance for their children.
As of July 31, there were 112,871 children in MCHP, including 6,501 whose families pay the premium.
Medicaid accounts for 20 percent of Maryland's total budget - or about $4.5 billion, a huge drain on the state's resources. Of that, about $154 million is spent on MCHP. Medicaid will not be sustainable in the future at its current growth rate. Medicaid cost growth nationwide is attributable to increasing costs of medical technology, including prescription drugs, the aging of the baby boom generation and eligibility expansions to higher-income populations.
Americans value the excellent health care available to us, but it doesn't come for free. As costs continue to rise, we all need to chip in.
Requiring individuals to contribute has two benefits. To begin with, it helps pay for the services. Even more important, cost sharing encourages people to become more responsible health care consumers. As people are made sensitive to the costs of care, they are more likely to seek out the services that have true value to them.
Maryland's goal is to ensure that children have access to the high-quality health care they need. We can't ignore the responsibilities of parents in achieving this goal.
Nelson J. Sabatini is secretary of the Maryland Department of Health and Mental Hygiene.