Wednesday, April 30, 2008

Cities and States Usurping Federal Law 

Health insurance by mandates?

By Merrill Matthews, Jr.

Categories:  California, Insurance Regulation, Maryland

Federal law severely limits state and local efforts to pass sweeping health care reform legislation. But a case now being reviewed by the 9th Circuit Court of Appeals, regarding a San Francisco law that forces employers to provide health insurance or pay the city an assessment, could change all of that. And in so doing, it might fundamentally change the availability of good health insurance coverage.

Unwilling to wait on federal health care reform legislation, several states have taken their own steps.

A few years ago, for example, Maryland passed legislation, over the governor's veto, requiring that large for-profit employers (more than 10,000 employees) spend at least 8 percent of payroll on health care or pay an assessment (read "tax") into a state fund to pay for the uninsured (also known as "pay-or-play" legislation). The legislation was dubbed the "Wal-Mart bill" because Wal-Mart was the only company in the state that would be affected - a fact both understood and intended.

The law was challenged based on a federal law known as the Employee Retirement Income Security Act, or ERISA, which pre-empts state efforts to micromanage certain employer benefit plans. The purpose behind the health-related portion of the 1974 legislation was clear: to allow large employers to offer a standard health insurance plan in multiple states without those states constantly trying to interfere with the design, benefits or administration of it.

In the ensuing 30-plus years, ERISA has become a bastion against state interference in employer- provided health insurance. Just imagine some of the potential problems. Each state requires health insurance to cover certain providers and benefits, known as mandates. The number of mandates vary from 15 in Idaho to 64 in Minnesota - with a total of 1,961 nationwide. Without ERISA, a large employer would have to deal with each state's health insurance laws and mandates separately, creating what could be vastly different coverage from one state to another. It would be an administrative nightmare, and employers might find it easier just to give a raise and drop the coverage.

ERISA puts a halt to those attempts by allowing employers that self-insure (i.e., the employer bears the risk of loss) to offer a uniform plan to all its employees. And the courts have consistently ruled in favor of the ERISA pre-emption when states have tried to get around it. So, when a suit was filed against the Maryland legislation, a federal judge correctly ruled that ERISA pre-empted the law.

However, state lawmakers, miffed by this limit on their abilities to make health insurance more regulated and expensive, constantly threaten to return with revised legislation that will survive an ERISA pre-emption challenge. But they never do.

Thus, no one was terribly surprised when the city of San Francisco decided to pass pay-or-play legislation, or when the Golden Gate Restaurant Association filed suit. The trial court ruled last December that the legislation violated ERISA.

What was a surprise was when on Jan. 9 the U.S. Court of Appeals for the 9th Circuit lifted the injunction, suggesting that the city just might succeed in challenging the ERISA preemption and therefore its plan should be allowed to move forward. A 9th Circuit merits panel will conduct a hearing, which is supposed to be concluded by mid-April.

Under the San Francisco law, large employers (100 or more employees) will be required to contribute $1.76 per hour for each covered employee. That's a 10 percent increase for someone making $17 per hour, or about 20 percent for someone making $8.50 an hour.

Mid-sized employers (20 to 99 employees) must contribute $1.17 per hour.

Employers that still refuse to provide health insurance will be penalized 1.5 times that amount, up to $1,000 per employee per week. (Higher paid management and supervisors are exempted.) Because the 9th Circuit differs from the Maryland ruling, there's a good chance the issue will move to the Supreme Court - which has already ruled several times in favor of ERISA.

Let's hope it does so again. States are all over the map when it comes to health care legislation; they are even more diverse when it comes to reforming the health care system. Witness Massachusetts' sweeping health care reform, which has not yet been challenged under ERISA because no one has filed a suit against it.

And if cities are also allowed to jump in - proudly boasting they have done something about the uninsured, while passing the costs over to employers - standardized benefit plans for employees would become a thing of the past.

If states really want to get into the health care reform battle, they should follow the ERISA example, which provides employers with a lot of flexibility to design good plans that are affordable.

San Francisco and the states may think that what they are doing will decrease the number of uninsured. The truth is they will almost surely undermine employers' efforts to provide good comprehensive health coverage.

• posted by Merrill Matthews
• 8:37 am
• 0 comment

Tuesday, April 22, 2008

Dental Hygienists Get Some Freedom in Maryland 

New law allows them to practice more widely

By Marc Kilmer

Categories:  Maryland

As the Washington Post reports, dental hygienists in Maryland will have a little more freedom in Maryland:

The measure, which should take effect Oct. 1, will allow hygienists to provide preventive care such as cleanings, sealants and fluoride treatments in public health settings such as clinics, schools and Head Start programs without prior authorization or direct supervision of a dentist.

This expansion of both hygeniests' freedom and patient choice is a step in the right direction. There is no need for a hygienist to have the direct supervision of a dentist for many procedures. Giving them more autonomy has the potential to expand access to care and lower prices. Unfortunately the bill does not apply to hygienists to have the same autonomy in private practice.

• posted by Marc Kilmer
• 9:04 am
• 0 comment

Thursday, April 17, 2008

Maryland Using Tax Records to Search for Medicaid Recipients 

By Marc Kilmer

Categories:  Maryland, SCHIP

If you are eligible for the Maryland Medicaid program or the Maryland Children's Health Insurance Program (MCHP), expect to see a letter from the government informing you of that. How do they know? They will use your tax records, of course. Sure, you thought that information was only used to determine how much you owe the government in taxes. You may have thought that since the Maryland tax forms explicitly state:

• posted by Marc Kilmer
• 10:41 am
• 0 comment

Wednesday, April 16, 2008

The Flaws of Single-Payer 

A Canadian and an American perspective

By Marc Kilmer

Categories:  Maryland

Today the Maryland Public Policy Institute and the Atlantic Institute for Market Studies (AIMS) -- a Canadian free market think tank -- released a report authored by Ian Munro and me regarding how a single-payer system would affect Maryland. There have been a few bills introduced in the Maryland General Assembly to introduce a statewide single-payer system. I analyze these proposals and find that they would result in a much higher tax burden on Marylanders. Ian Munro brings a Canadian perspective on what a state single-payer system would mean in terms of reduced care.

• posted by Marc Kilmer
• 5:07 pm
• 0 comment

Tuesday, April 15, 2008

CMS Incentivizing Electronic Health Records 

Maryland MDs among the recipients

By Marc Kilmer

Categories:  Maryland

The Centers for Medicare and Medicaid Services (CMS) is using incentives to try and get more doctors to use electronic health records:

The federal agency presented the pilot incentive project to Maryland's doctors Thursday afternoon in Baltimore. Federal health leaders said they will select 12 communities where the project will launch by June....

Converting an individual patient's health records to a digital format could help reduce medical errors and health care costs. The records could be viewed by a patient's doctors, hospitals, pharmacists and insurance carrier.

But state medical leaders said the costs of installing and operating a system may be prohibitive for some physicians in Maryland. The systems can cost $40,000 to $50,000 on average to implement, said Marty Wasserman, executive director of MedChi, the state's medical society.

There has been a lot of discussion about why many doctors fail to keep up with new technology for health records. Is the idea that electronic health records will help reduce errors and save money a widely-accepted myth that, like the idea that preventative medicine will save money in the long run, will be exposed to be false? Or is it really a good idea? Is this CMS initiative the best way to achieve this? I really don't know. If someone reading this has some good resources on this topic, I'd love to see them.

• posted by Marc Kilmer
• 3:58 pm
• 0 comment

Wednesday, April 2, 2008

New Nanny State Health Fear: Tanning Beds 

Maryland legislators cry: "won't someone think of the children?"

By Marc Kilmer

Categories:  Maryland

With budget problems looming in the state, Maryland state senators decided their time was best spent approving a measure to protect minors from the scourge of tanning beds. One legislator gave his colleagues a medical lesson in his attempts to promote the bill: "Skin cancer is serious. It can kill you." Apparently if skin cancer was funny but could still kill you it would not merit legislative action.

Under the bill, minors could only use artificial tanning devices with signed parental consent. Predictably, this was too lenient for some:

"This bill is child abuse," said Sen. Delores G. Kelley, a Baltimore County Democrat. "It would be the equivalent of a parent being able to take your 12-year-old to the liquor store and sign for them to have liquor."

Next up for the Maryland Senate: a bill to prohibit minors from going outside on sunny days without signed parental permission.

• posted by Marc Kilmer
• 12:28 pm
• 0 comment

Wednesday, March 26, 2008

Maryland Moving to Enroll More in MCHP 

Using income taxes to entice kids onto state health care

By Marc Kilmer

Categories:  Maryland, SCHIP

The Maryland House of Delegates passed legislation that would alert parents of children who are eligible for the Maryland Children's Health Program (MCHP) about that eligibility with their income tax returns. In future years, it would mandate that parents tell the state whether their children have health insurance.

This type of Big Brother program seems a natural outgrowth of the desire to use taxes to shape behavior. Unlike most efforts in this direction, the whims of elected officials aren't being carried out by tax deductions or credits but through co-opting revenue agents to shill for government health care. I am uncomfortable with how much information the government has collected on me through my tax forms. At least I have some assurances that this information is being collected in order to ensure I am paying my "fair share" in taxes.

Now, however, Maryland wants to use that information to promote government health care. I never thought I'd advocate for letting state revenue agents alone to accomplish their jobs, but I don't think turning them into cheerleaders for MCHP is a good use of taxpayer money.

The legislation's sponsors initially had a mechanism to punish parents who had not signed up for MCHP by denying them their child tax deduction. At least this troubling aspect of penalizing people who do not take government aid was removed from the bill.

• posted by Marc Kilmer
• 1:07 pm
• 0 comment

Thursday, March 13, 2008

Trans Fat Ban Marches Forward 

Maryland, Boston moving forward with bans

By Marc Kilmer

Categories:  Maryland, Massachusetts, Nanny State

Boston's health care commission voted to ban trans fats from city restaurants, stores, schools, and hospitals. In another bastion of "progressive" thinking to the south, Maryland legislators approved a study of whether or not the fats should be banned (a likely precursor to a future ban).

My wife and I were in Montgomery County in Maryland today and stopped at a Krispy Kreme for a doughnut. Montgomery County has already approved a ban on trans fats and the Krispy Kreme trumpeted the fact that its doughnuts had 0 grams of trans fats. Does anyone really think this makes their doughnuts healthy? I'm sure the doughnut I ate there is just as bad for me as a doughnut I eat in any county where trans fats have not been banned. But I guess as long as the legislators see it as their duty to play our nannies, this type of legislation will continue. 

• posted by Marc Kilmer
• 5:49 pm
• 2 comments

Thursday, February 28, 2008

Maryland May Delay Medicaid Expansion 

Not enough revenue to fund it

By Marc Kilmer

Categories:  Maryland, Medicaid

The Baltimore Sun reports on Maryland's lower-than-expected tax revenue and the problems it is causing for the state budget. On the heels of an unprecedented slew of new taxes imposed in November, the legislature is finding that there still may not be enough money to pay for all the goodies they would like to give away. Of course, during their special session to raise taxes they also expanded spending, including raising eligibility for Medicaid. Now that expansion may be in jeopardy:

Bigger savings could be achieved by delaying funding for a new Chesapeake Bay fund to which lawmakers plan to allocate $50 million a year for cleanup efforts, or by modifying a plan to expand eligibility for Medicaid, the government insurance program for the poor. Both proposals were approved during the special session.

When the Senate Finance Committee conducted a four-hour long hearing on expanding Medicaid in October, I was one of two people to testify against it. I reminded legislators that in the face of a recession, tax revenue is lower than expected and Medicaid spending is higher than expected. It would be foolish, I said, to expand Medicaid in light of the recession and Maryland's current tax revenue problems.

As you may expect, my testimony was completely disregarded. I guess the current problems in Annapolis are some sort of vindication. Considering the financial mess our state is in, however, I can't take too much comfort in it. After all, it's taxpayers like me who are going to suffer the most.

• posted by Marc Kilmer
• 3:52 pm
• 0 comment

Friday, January 25, 2008

Maryland ERs Facing Doctor Shortage 

By Marc Kilmer

Categories:  Insurance Regulation, Maryland

According to Maryland's association of physicians and doctors, the state is facing a shortage of emergency room doctors. They place the blame on low reimbursement rates from insurance companies:

"'Because emergency services physicians are in short supply, they are demanding high salaries,' [Dr. Louis] Pimentel said. 'The reimbursement rates are not keeping up with what they can get in Virginia, where the reimbursement is much better.''

As the article goes on to point out: "According to the physicians association — the Maryland State Medical Society, or MedChi — about 85 percent of insurance coverage in Maryland is controlled by two companies, CareFirst BlueCross BlueShield of Maryland and Mid Atlantic Medical Services LLC, a subsidiary of UnitedHealth Group Inc."

Maryland has made it very difficult for insurance companies to operate in the state. Its level of mandates is among the highest in the nation and the Maryland Health Care Commission places such stringent regulations on insurance companies that it is little wonder that two companies dominate the market. It is difficult for others to gain a foothold, or they simply do not want to do business within the state's borders. Unfortunately, the likely result of this doctor shortage will be that the state will start regulating the reimbursement rates for ER doctors.

• posted by Marc Kilmer
• 11:29 am
• 2 comments