Maryland legislators call for health insurance down payment plan

Capital News Service

Marylanders without health insurance would be required to pay a state penalty that can go toward purchasing coverage, under legislation to be introduced next year by state Sen. Brian Feldman and Del. Joseline Peña-Melnyk.

Proponents touted the plan Tuesday at a news conference, followed by a scheduled legislative hearing on health care in Annapolis.

Under the proposal, anyone in the state who reports not having quality health insurance would be required to pay a penalty, similar to the federal mandate that will end in 2019 under changes to the Affordable Care Act.

Maryland’s proposal would allow the funds to go toward purchasing a health insurance plan rather than into a general pool for all Marylanders, said Feldman, D-Montgomery. The federal mandate, on the other hand, goes into a general pool of penalty payments toward covering everyone.

“We intend to make enactment of the Health Insurance Down Payment proposal a priority for the 2019 Maryland General Assembly session,” Feldman said. “We must protect Marylanders’ health care coverage and we know that everyone benefits when we expand health care access.”

Nearly 80,000 Marylanders would be eligible to gain coverage through paying the state penalty, according to a report from the U.S. Agency for Healthcare Research and Quality and the Maryland Health Services Cost Review Commission.

Feldman said this is a creative proposal that differs from the federal mandate to “ensure more Marylanders have health insurance, and in turn, keeps costs down.”

“When more people enroll in coverage, the costs come down for everyone,” said Peña-Melnyk, D-Prince George’s and Anne Arundel. “More young and healthy people in the individual market means that risk levels are better and premiums are lower. Fewer uninsured means lower uncompensated costs in hospital emergency rooms, which means fewer of those costs get passed on to the rest of us.”

Although premiums have continued to increase in the last five years, those increases are declining each year as more people sign up for coverage.

New data prepared by the Maryland Citizens’ Health Initiative Education Fund reveals annual increases in the average small group premium in Maryland dropped from 5 percent to below 1 percent since the Affordable Care Act went into effect in January 2014.

The data, reported by the U.S. Agency for Healthcare Research and Quality and the Maryland Health Services Cost Review Commission, affirms that since the Affordable Care Act was introduced in 2014, the uninsured rate in Maryland dropped nearly in half, going from about 12 to 6 percent in 2017.

The annual cost in Maryland of uncompensated care — when people without health insurance receive treatment — fell from about $1 billion to $700 million in the same time period, while more than 400,000 Marylanders received insurance.

Peña-Melnyk said a plan like this is essential for filling the gap where the Affordable Care Act’s individual responsibility is being cut off.

She said if a new individual mandate isn’t passed, according to the Urban Institute, about 69,000 Marylanders would lose insurance and individual market premiums would rise about 16 percent.

The Maryland mandate would be used as a down payment for health insurance. For some, it would cover the cost; others would need to supplement that amount.

Public health advocates are hoping to see those costs drop if more Marylanders opt in for coverage. Beth Sammis, president of Consumer Health First, said one of the most difficult aspects of getting a larger pool is motivating young, healthy people to opt in to coverage.

“It’s a hard group to reach,” Sammis said. “(But) now they’re told you have to pay a fine. Now that it’s been brought to their attention, they could be interested in paying the fine and having health insurance.”

Last year, state legislators attempted to pass the Protect Maryland Health Care Act of 2018, a similar bill that would have required the state to create an insurance stabilization fund and the health insurance down payment escrow fund. Also sponsored by Feldman, it failed to make it out of Senate committees.

Though the original down payment plan never reached Republican Gov. Larry Hogan’s desk last year, advocates are hopeful this will be a priority in the upcoming legislative session.

Feldman cited Maryland’s reinsurance program – a 2018 bill allowing the state to forgo certain Affordable Care Act rules to mitigate loss from covering risky patients – in praising Hogan for a “bipartisan, collaborative effort” and said he hopes to have a similar experience this year.

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