Maryland Lawmakers Consider Creating ‘First-of-Its-Kind’ State-Run Health Plan for Uninsured

Maryland lawmakers are considering creating a "first-of-its kind" state-run health insurance program, aimed at providing coverage to the "poor and the chronically ill," the Washington Post reports. The plan, however, "hinges almost entirely" on the profit status of Care First Blue Cross Blue Shield, the state's largest insurer. Long viewed as the "most reliable source of health coverage for the poor," the not-for-profit insurer has begun "hinting" that it is considering a switch to for-profit status, which would "free" it from the responsibility of covering "costly, chronically ill" patients. If the "insurance giant" switches status, it would be required to return funds to the state that it "amassed" through discounts and tax exemptions due to its not-for-profit standing. Estimates vary, but the Post reports that Maryland could receive between $500 million and more than $1 billion. Most lawmakers, "already aching" to spend the money, agree the funds should be earmarked for health care. Del. Michael Busch (D) said, "This is a lot of money that a lot of people are going to want to put their paws on. Before that happens, we need to set up some rules and use this money to create something for folks who can't get coverage from private insurers."

Possible Spending Plans
Under state law, any funds from a conversion are supposed to go to the Maryland Health Care Foundation, a quasi-public agency that funds charitable projects for the state's health needs. However, many doubt the foundation, which currently oversees about $2 million, could handle a "war chest" of the size that would result from a Care First conversion. As a result, Busch and state House Majority Leader John Hurson (D) have proposed creating a new state agency with the funding. Called the Maryland Health Insurance and Assistance Fund, the agency would manage a "bare bones" insurance plan for those who cannot afford or do not qualify for other coverage, at an estimated cost of about $50 million a year. The plan is modeled after a state automobile insurance program. Frances Phillips, Anne Arundel County's health officer, who supports the plan, said, "Everything we're doing now is stop-gap. We're trying to care for the people who fall through the cracks, and those cracks are pretty wide." Critics, however, note "there is a reason no other state has fashioned its own health insurance plan on the scale being discussed in Maryland," saying that such a program would "burden taxpayers" with costs for treating the uninsurable that "private companies should be shouldering." Care First officials have not commented on the possibility of a conversion, but said the switch would allow the insurer to "stay afloat in an increasingly competitive market" (Mosk, Washington Post, 3/19).