New federal health care mandates will cost the state of Maryland roughly $18 million in fiscal 2012, according to legislative analysts. Driving the costs is a federal mandate requiring the state to expand health coverage to adult children up to age 26, according to Maryland health policy analyst Simon Powell. Maryland already covers adults up to age 25. The one-year difference will cost the state $16 million.
Gov. Martin O’Malley’s proposed changes to Maryland employees’ health benefits — while eventually helping to restore a long-term $15 billion underfunding to the health benefits system — would knock the state out of compliance with certain federal requirements and cost another $2 million in fiscal 2012.
“It’s basically a cost to us to comply with the federal health care reform requirements,” Powell said. But the savings ultimately will outweigh the costs, he added.
Under its health plan for current and future retirees, Maryland is exempt from new federal mandates requiring the state to revamp its benefits appeals process and pay more toward preventive health services.
“However, proposed changes to the plan in the fiscal 2012 budget mean the plan is no longer [exempt],” according to a report by the state’s independent Department of Legislative Services.
O’Malley’s fiscal 2012 budget proposal would drive up teachers’ and state employees’ prescription drug costs and scale back some benefits. The plan would save the state roughly $47 million.
Maryland will not begin realizing savings from federal health care reforms until fiscal 2014, according to the Maryland Health Care Reform Coordinating Council.
The state will see a net loss of $16 million in the next two fiscal years and then recoup $133 million in fiscal 2014. Total savings will add up to $829 million by fiscal 2020, according to the council.
In it’s report, the Department of Legislative Services noted that state lawmakers should expect proposals this session that would limit, alter or oppose selected parts of the federal health care act, in the wake of a similar moves by other states.
But O’Malley has said Maryland will forge the way in implementing federal reforms, despite any disputes in the courts.
There have been more than two dozen legal challenges in 26 states — including Virginia — against the federal health care act. A U.S. district judge in Florida ruled the federal health care overhaul unconstitutional in late January. The Florida case is expected to go to the U.S. Supreme Court, and Virginia has asked the court for an expedited ruling on its suit.
“One thing you won’t see from my office is suing the federal government over health care reform,” Maryland Attorney General Douglas F. Gansler has assured state
lawmakers.
