National health care reform [1]
is expected to save Maryland $829 million over the next decade and
provide coverage to nearly 350,000 people — reducing the number of
uninsured in the state by half, according to a report released by state
officials Monday.
The savings will be achieved by supplanting state spending with
increased federal funding for health care programs for those who can't
afford it, according to the report from the Maryland Health Care Reform
Coordinating Council, which was convened a day after the 2,000-page
federal legislation was signed into law in March.
As more people get health insurance, the state also expects to see
declines in uncompensated care. The cost of treating the uninsured who
seek treatment and can't pay the bill is incorporated into hospital
rates paid by private insurers and Medicaid [2]. So as more people get insurance, the state is expected to save.
"National health care reform can
only be as successful as our ability to implement it in the states," Lt.
Gov. Anthony G. Brown told a group gathered Monday outside the
Baltimore Health Department's East Baltimore center, which sees many of
the city's 125,000 uninsured.
Brown co-chaired the health reform council with Health Secretary John M.
Colmers. Their report sets up the structure for implementing the
federal health care legislation in Maryland, most of which is to take
effect in 2014.
Many states are starting to examine the impact of reform, said Robin
Rudowitz, associate director for the Kaiser Commission on Medicaid and
the Uninsured. While all states will gain federal funding, she said, the
savings will vary depending on many factors, including the number of
uninsured in a state, what programs are in place and how states choose
to execute reform.
"All states are doing their own estimate for the overall impact of
reform, but it will vary widely across states," Rudowitz said.
Under the reform, the uninsured will be able to get coverage through
exchanges where people can shop for insurance with subsidies, while
others will get coverage through the expansion of Medicaid, the program
for the poor and disabled. Others will qualify for the Medicare health
program for the elderly.
Maryland is ahead of the curve in many ways because it has worked to
expand coverage to 205,000 people since 2007, including 100,000
children.
The state created incentives to small business owners who offer
insurance to employees, extended Medicaid coverage to parents making up
to $20,500, and allowed young adults to remain on their parents'
insurance plan up to the age of 25. Maryland also has a high-risk pool
to cover people with pre-existing conditions.
About 14 percent of Marylanders, or 700,000 people, are currently
uninsured. That will drop to about 6.7 percent with national reform, the
council believes. Those expected to remain uninsured would be illegal
immigrants and those who choose not to be covered, according to the
report.
The savings attained through national health care reform will be so
great in the initial years that it will offset the extra costs the state
will face, including administrative costs to enroll people in programs,
according to the council.
But federal funding will drop off over time, so that the savings will
peak in 2019 and start to decline in 2020. The council, in its report,
warned that state officials should squeeze inefficiencies out of the
health care system as it takes on more of the costs over time. Colmers
and Brown said they would work closely with hospitals and insurers on
ways to bring down costs.
"We have to implement realistic reform and at the same time improve
quality of care so we can drive and bend down costs in the next 10
years," Gov. Martin O'Malley [3] said Monday.
The cost analysis was calculated by the Hilltop Institute, a research
center at the University of Maryland, Baltimore County. The institute
said they used conservative estimates and that costs could change over
time.
Kathleen Stoll, director of health policy at advocacy group Families
USA, said there is the potential for long-term cost reductions in health
care. She said Maryland is smart to examine the issue now.
"They need to be in the game early to think about how they will proceed
with implementation," Stoll said. "There is potential for great savings
over the longer term, but it will have to be done by making changes that
will be good for consumers from a quality perspective and that will
also save money."
Many of the components of reform don't go into effect until 2014,
including individual mandates for insurance coverage, a Medicaid
expansion and the creation of health care exchanges.
But preparing for the implementation of programs will take time. The
12-member Health Care Reform Coordinating Council is to spend the next
several months figuring that out.
Brown has said the report is a foundation for how to implement reform.
The council established six working groups to study a range of issues,
such as how to set up exchanges, set criteria for enrollment and create
programs for people who still won't be insured once reform is in place.
A final report is due to O'Malley by Jan. 1.
"This is a very good structure on which implementation of federal reform
can be built," said Vincent DeMarco, president of the pro-reform
Maryland Citizens' Health Initiative. "Now to get to the substance.
Without this structure set up, talking about the substance would have
been difficult."
This article was published by The Balitmore Sun on July 26th, 2010 and was written by Andrea Walker.