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A Mass.-style health plan merits Md.'s attention


The future of Maryland health care is starting to arrive, and it doesn't involve forcing Wal-Mart and only Wal-Mart to slightly improve medical benefits.

Instead, it may resemble what was just approved in Massachusetts, by a Republican governor "more conservative than" Maryland Gov. Robert L. Ehrlich Jr. and by a legislature "more liberal than Maryland's," says Ed Haislmaier, a former Pfizer executive and now a health-policy scholar at the Heritage Foundation.

The future of Maryland health care under a Massachusetts-style scheme would be far from perfect. But it would reduce the cost of coverage for thousands.

It would shrink the rolls of uninsured. It would let people carry coverage from job to job. It would let individuals and small-business workers buy the same policies offered through big employers.

It will look a little like Hillary- care, with a big government clearinghouse overseeing cover- age.

And, in an indication of how health policy has evolved, the people pushing it hardest are Republicans and business types.

"It's more affordable and more efficient than anything we've seen," says Robert O. C. Worcester, head of Maryland Business for Responsive Government, which has spent years fighting big government.

Last week U.S. District Judge J. Frederick Motz struck down a Maryland law that forced Wal-Mart to increase employee medical coverage or pay a tax.

It seems a fatal blow. Federal law allows states to force insurers to cover certain medical conditions. But it doesn't let them force employers to offer coverage, and on that basis Motz nullified the Wal-Mart law.

The decision opens the way for alternatives to addressing the health care conundrum, which in Maryland leaves hundreds of thousands of people without coverage.

A proposal by Eastern Shore Republican state Sen. E. J. Pipkin - a plan that shares the genealogy of the Massachusetts program - should get a serious hearing when the legislature convenes in January.

The proposal's centerpiece is a health-insurance "exchange" run by Maryland government. It would be loosely based on the U.S. government's scheme that allows federal employees to choose from numerous health plans and keep coverage if they move from agency to agency.

"This is not a purchasing outfit," as would have been the case with a plan brokered by former first lady Hillary Rodham Clinton, says Haislmaier. "This is an exchange. It's like a farmer's exchange. Like a stock exchange. You put your wares out there and people decide what to buy."

Anybody could shop, without being barred by a pre-existing illness. If employers agree to participate, workers could spend company-provided insurance premiums on any plan in the exchange.

Workers would like the variety. Employers - especially small ones - would like the hassle-free way of offering health coverage. Insurers would like the chance to reach millions of customers directly, without going through corporate human resources departments. And most of it would be paid with pretax dollars, as now.

A worker switching jobs could keep her plan, substituting premium contributions from her new employer for those of her old employer. Because a big portion of the uninsured lack coverage only temporarily, when they're between jobs, Haislmaier claims portability could cut the rolls of uninsured by as much as half. He helped frame Pipkin's health package in this year's General Assembly.

The exchange would let even companies contributing zero dollars for health coverage offer a wide variety of tax-deductible coverage for their employees - at employee expense, of course. The self-employed could buy policies. So could the unemployed.

Yes, affordability would be an issue for these groups. And premiums for the unemployed would be paid with post-tax dollars because federal law stupidly allows deductibility only for employer-sponsored health plans.

But if done right, a new Maryland health plan could address the affordability issue.

For one thing, Maryland compels insurers to cover more medical procedures than perhaps any other state, which drives up the cost of coverage. These "mandates" should be reduced. Why allow only Cadillac coverage when some people can afford only a Hyundai?

Another way to make coverage more affordable would be to redeploy Medicaid money to pay premiums in the insurance exchange.

And the best idea of all, which Massachusetts has embraced, is to require anybody who can afford health insurance to buy it. (This was not in Pipkin's proposal.) We already do it for car insurance. Compelling medical coverage would reduce "free riders" who lack insurance but get treated gratis in emergency rooms. Charges for this care are built into everybody else's premiums.

I don't like parts of Pipkin's proposal. He would trash the price controls that have worked well in Maryland for years. And he would loosen restrictions on building new hospitals and other medical facilities, which risks making medical inflation worse.

But I agree when he says this:

"Our discussion in the legislature has been, 'How can we do more mandates and have the government and big business be in control?' We should do something that puts the consumers more in charge of their fate."


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