Free pass to HMOs wrong, but reform is the real issue

January 28, 2005

The decision by Maryland's insurance commissioner to allow health-maintenance organizations to pass on a 2 percent premium tax to their customers underscores the urgency of continuing to work on the medical malpractice issue.

We believe Commissioner Alfred Redmer Jr. should have held a hearing on the increase. But the estimated $10 to $15 per month per person increase HMO subscribers or their employers now face should spur the legislature to act.

Some background: Gov. Robert Ehrlich called the legislature into special session last month to pass a bill to relieve the financial suffering of the state's physicians, who were facing, on average, a 33 percent increase in their malpractice insurance rates.

Ehrlich suggested that the millions needed to create a so-called "stop-loss" fund to give doctors immediate relief could come out of the state's general fund. Legislative leaders pointed to Maryland's projected deficit and felt they needed a new, dedicated funding source.

Ehrlich, for his part, said he wouldn't accept the new tax and vetoed the bill. The legislature then overrode the veto.

In a press conference Tuesday, House Speaker Michael E. Busch and Senate President Thomas V. Mike Miller scolded Redmer for a Jan. 13 bulletin he sent to insurers.

In it, he told companies that they could have the rate increase just by sending a letter to the Maryland Insurance Administration.

The Associated Press reported that Redmer has since backed down from that, saying that insurers must first wait for his agency to respond in writing.

In our view, Redmer is not guilty of malfeasance, as Miller charged, but giving the green light to automatic increases was one dumb move. Even if a hearing would have been nothing more than a formality, he should have held one anyway, given the controversial nature of this issue.

That said, legislative leaders shouldn't be let off the hook, either. The only action that will address the question of health-care costs is comprehensive reform. The sooner that effort gets under way, the sooner everyone can start arguing for a rollback of insurance prices.

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