By JASON RUITER
WASHINGTON (Sept. 27, 2013)—A 2007 Maryland law expanding the state’s Medicaid program, along with job losses during the recession, has put Maryland near the front of a national trend where the number of people on public health care coverage has increased while the number on private health insurance has declined, experts say.
Maryland is the seventh highest in the nation since 2008 in the increase in percentage of people choosing public health coverage, like Medicaid or other state medical assistance programs, according to data released by the U.S. Census Bureau this month. More than 100,000 people have joined public health care programs in Maryland since 2008, bringing total enrollment to about 900,000.
Private insurance rolls decreased significantly in Maryland since 2008—about 5 percentage points—to 3.6 million people.
“You saw a decided effect in the immediate recession years … From what I’ve seen, I would say most” people are switching from private health insurance to public, said Matthew Buettgens, a senior research analyst at the Urban Institute’s Health Policy Center. “It would have to be most of it. The large majority of people get their coverage through their employer.”
If the economy recovers, however, the trend can reverse Buettgens said.
In the last two years, with the recession’s effects abating, Maryland’s increase in public coverage is higher than all but 13 states.
That’s probably because Maryland—which has the third lowest poverty level and the highest median household income in the nation—wanted it that way.
“It’s simply because of the law enacted in 2007” that more people are opting for public health coverage, said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative. “(It’s) the Working Family and Small Businesses Health Coverage Act.”
Under the law, Maryland residents’ income no longer needs to be 40 percent of the Federal poverty level ($9,420 for a household of four) to qualify for Medicaid, but 116 percent ($27,318 for a household of four).
The former rate was “abysmally low,” DeMarco said.
Medicaid, which was enacted in 1965, is a federal-state government program that provides health insurance for the poor.
Small businesses are also eligible to receive subsidies through the 2007 law.
Jamal Lee, owner of Breasia Productions, an event venue in Laurel, was able to qualify because his business had fewer than nine full time employees who were paid less than $50,000 a year on average.
“We’re paying, on average, about $150 a person” for employee health insurance a month, Lee said. “We were going to be paying $450, $500 a person” without the law.
Lee, who owned Breasia Productions before the law was enacted, said he once flew to Panama for several root canals and a teeth cleaning because it was actually cheaper than a local dentist.
“We’ve had so much negative before this, that we’re really just happy to be saving money. I don’t really have a bad thing to throw out there right now” about the program, Lee said. “I’m just elated that I’m saving money here with healthcare reform.”
Enrollment in the state’s Medicaid program has increased 58 percent since 2007, according to data provided by Chuck Milligan, deputy secretary, health care financing, for Maryland’s Department of Health and Mental Hygiene.
“We’ve added, as of August 2013, 105,000 parents being provided who were not previously,” Milligan said. Children qualify for Maryland Children’s Health Program, not Medicaid.
Now that the recession is fading, Buettgens thinks that the burst of those covered by public health programs may level out and perhaps even decline as the economy improves.
But Maryland, which weathered the recession better than many states, may continue bucking those expectations.
Gov. Martin O’Malley, who signed the 2007 law expanding Medicaid in his first year as governor, has jumped at the chance to create Maryland’s own exchange for Obamacare, which opens Oct. 1.
The implementation of the national health insurance program gave states the option to create their own exchanges, but many states have chosen to leave it to the federal government.
Maryland expects 108,000 new enrollees in Medicaid through Obamacare, according to the Maryland Department of Budget and Management.
The gains through medical assistance programs, however, can be costly.
In the current state budget, 71 percent, or $7.4 billion, of state medical expenses went to Medicaid. The state spent more than $10 billion on health services and the department of health this year.
DeMarco said the 2007 law wouldn’t have been possible if the Maryland legislature didn’t pass a separate law taxing alcohol and tobacco. The tobacco tax, DeMarco said, was about $1 extra per pack of cigarettes.
Lee, whose business saved thousands per month through state subsidies on health insurance, contemplated the tax.
“When I go out and drink, I think ‘wow, that’s expensive,’” Lee said. “But I realize that the money I’m spending is going toward something really good.”