Whether Maryland’s Democratic candidates for governor would work to protect the Affordable Care Act, aka Obamacare, isn’t even a question. Heck, even Republican Gov. Larry Hogan is doing that. Their policy platforms on the issue generally call for the state to take steps that the governor has already taken — either in partnership with the General Assembly or on his own — in terms of pursuing a system of reinsurance to help hold down premiums on the state individual insurance marketplace and in expanding Maryland’s innovative system of paying for hospital care to physicians and other health care providers. All the major Democratic candidates have gone a step further than Mr. Hogan has (so far, anyway) in endorsing a state version of the now repealed federal requirement that most individuals purchase health insurance, and most are also pushing for state controls on the price of prescription drugs.
But there is one big issue that divides the Democrats: a Medicare-for-all, single-payer system. Former NAACP CEO Ben Jealous has made creating a state version of that a centerpiece of his campaign, whereas the other major candidates have endorsed measures short of it.
That’s not to say all the other candidates oppose single-payer on principle. Attorney Jim Shea says he believes the nation will inevitably move toward such a system. State Sen. Richard Madaleno has called it the ideal solution on a national level but unworkable for the state to do on its own. He and fellow candidates Alec Ross and Krish Vignarajah have, instead, proposed a state-run public insurance option on the ACA exchange. Mr. Jealous rejects that idea, saying it would do little to expand coverage or reduce costs.
He points to a Rand Corporation study of various options for Oregon to move toward more universal coverage, one of which was a public option. The study’s conclusion was that it would reduce the percentage of Oregonians who lack health coverage by one percentage point, and it would reduce average per capita health care expenditures by about 3 percent, though the benefits would mostly flow to the small segment of the population that buys insurance on the individual exchange. However, it’s unclear whether even those modest savings would materialize in Maryland. Rand assumed that a public option would pay Medicare fee-for-service rates, which are lower than those paid by commercial insurers in every state except Maryland, thanks to our unique all-payer system.
But the same Rand study outlines just how hard it would be for a state to establish a single-payer system. For starters, a state would have to convince the federal government to lump together its Medicare and Medicaid payments to support the new state system — a non-starter at least during the Trump administration, and possibly beyond. It would also need an exemption from federal laws that prohibit states from enacting certain kinds of regulations on coverage provided by companies that self-insure. Without it, there is no guarantee that those who currently have employer-based coverage will join the pool. And then there’s the question of cost. Rand estimated that single payer would be more or less cost neutral in Oregon on the assumption that state regulators would negotiate lower fees for services, which would offset the costs for additional care for the newly covered. But Maryland already sets fees under an all-payer system. How much more in savings can be achieved? Would the federal government continue to pay higher-than-normal Medicare rates in Maryland under a state single-payer system?
Mr. Jealous argues that Maryland’s experience with all-payer gives it a head start over other states in moving toward single-payer, and there may be something to that. We already have some of the regulatory structures and coordination among the various sectors of the health care industry that would be necessary. At the very least, a transition to single-payer in Maryland would present different issues than in other states, and it’s worth more serious study for that reason. But it’s hard to see such a system coming into existence here unless the political conditions nationally change radically. Consequently, voters should interpret Mr. Jealous’ commitment to the issue as more a symbolic marker of his candidacy than as something that would be likely to happen (for good or bad) if he’s elected.
What can the next governor do? He or she can work to secure long-term financing for the reinsurance system Mr. Hogan and the General Assembly authorized this year. (It’s worth noting that Mr. Madaleno played an important role in making that possible.) The next governor can work to enact the individual mandate down payment plan legislators considered. All the major Democratic candidates have endorsed the idea, which requires individuals to have health insurance but allows them to use any fine they are assessed for lacking it to purchase coverage. Beyond that, he or she can work on the cost of prescription drugs. Maryland’s anti-price gouging law for generic drugs was recently ruled unconstitutional, but other avenues for addressing the issue remain, including a more straightforward regulatory model that health advocates are now pushing. But the reality is, many of the most important things a state can to do expand coverage and reduce costs, Maryland is already doing.