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Blunt talk on health-care costs is wake-up call for business groups

December 03, 2003|by BOB MAGINNIS

Maryland Health Secretary Nelson Sabatini came to Hagerstown Monday to speak to members of the business community about the growing cost of health care. He told them their own lobbying groups haven't done their jobs very effectively and that some of the state's healthiest citizens are a big part of the problem.

Sabatini's appearance was part of a round of meetings being held around the state to promote Gov. Robert Ehrlich's plan for change in the state's health-care system.

Those changes will involve cutting costs, Sabatini said, since there will be no new money coming into the system. And somehow, he said, the state must deal with the "irresponsible" behavior of those who can afford to buy health insurance, but don't, reducing the pool of those paying into the system.

"In recent weeks, I've been very critical of the business community," he said, because it has been too passive in regard to health-care issues, even though rising costs impose an "incredible burden" on business.

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"If they don't come to the table, you might well see something that's not particularly pleasant," he said.

Those possibilities include the single-payer system promoted by the group Health Care for All, which would rely on taxes on payrolls - 6 percent for small business and 8 percent on large firms.

But Sabatini said he wasn't condemning that group because "there are no bad guys in this debate."

Forcing employers to offer health insurance isn't a good way to go, but Sabatini said he felt firms should be willing to encourage employees to get it by telling them how to do so and letting them to pay for it through payroll deductions.

Not doing something isn't an option, because health-care costs have increased by 14 percent since 2002, he said, even as the number of Maryland uninsured has increased to 700,000. No one measure will fix these problems, Sabatini said, because action is needed on many fronts.

First, there's Medicaid, a federal/state partnership which funds care for the indigent, which now costs the U.S. $285 billion a year, a figure he said will jump to $600 billion within 10 years.

"If that happens, the states will have no discretionary dollars in their budgets," he said.

Then there are malpractice costs, which add $100 billion to $125 billion to health care nationwide each year. Even though Maryland has a cap on pain-and-suffering awards, that increases by $15,000 each year and is now at more than $600,000, he said.

The state also must deal with the health-insurance mandates, which Sabatini said keep insurers from offering basic policies to the working poor.

He said the other problem is that there are some citizens who are young and relatively healthy and can afford to buy insurance but don't, trusting the state to pick up the tab if something catastrophic happens.

Former House Speaker Cas Taylor hoped to deal with this, Sabatini said, by penalizing such people by denying them certain state income-tax deductions if they weren't insured.

"If you could find some way to look at those who are at 300 percent of the poverty level and insist that they have some kind of insurance, you would immediately reduce the amount of uninsured by 40 percent," he said.

Other issues that need to be addressed include Medicaid, which has a basic benefit package he called "overly generous" and is administered in a way that patronizes recipients.

"People need to take some responsibility for the consequences of their behavior," he said.

On long-term care, Sabatini said he agreed that a spouse should not be impoverished when a mate goes into a nursing home, but said he opposed the movement to camouflage and conserve assets so they can be passed on to the next generation.

Though prescription drug costs have been the fastest growing portion of health-care costs, Sabatini said they've been moderating a bit because business has taken the initiative slow cost increases.

The state could do that, too, but so far hasn't had the political will to follow through, he said.

There's something in this reform package to offend just about every interest group, but with revenue growing at less than 10 percent a year, Maryland and the state's businesses can't keep absorbing annual health-care cost increases of more than 14 percent.

In a system in which everyone believes in sacrifice as long as someone else is doing the sacrificing, it will be interesting to see whether the state's healthiest citizens see it as their civic duty to help shoulder a greater share of the cost of caring for its neediest ones.

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