Maryland To Begin Planning New High-Risk Insurance Pool

The Maryland General Assembly has approved a new state-run, high-risk insurance pool, and a newly created state board will begin working out the details of the program July 1, the Baltimore Sun reports. Beginning July 1, 2003, the pool, called the Maryland Health Insurance Program, will sell insurance policies to residents unable to afford traditional health coverage because of pre-existing health conditions. The program will be paid for through member premiums and an charge assessed to state hospitals. About 30 other states have high-risk insurance pools, the Sun reports. The new program will replace an existing Maryland program -- called SAAC or "substantial, available and affordable coverage" -- that gives private insurers a 4% discount on hospital charges if they agree to offer health policies to individuals regardless of their medical histories. Studies by state regulators have shown that the discount "greatly exceeded" the cost of providing coverage to high-risk individuals, and the SAAC program had become a "windfall" for private insurers, according to state Insurance Commissioner Steven Larsen. In addition, a restructuring of state private insurance underwriting guidelines last year led some insurers to limit their participation or threaten to pull out of the SAAC program. "The wheels were coming off the SAAC vehicle," Robert Murray, executive director of the Health Services Cost Review Commission, said. The new program's planning board, which consists of Larsen, Murray, two other state officials and a consumer representative, will soon hire a program director, determine benefits and premiums and begin the process of choosing an insurance company to administer the plan, the Sun reports (Salganik, Baltimore Sun, 6/9).