Maryland: Medicaid Expansion and Small Business Assistance

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In July, Maryland began implementing health reforms that were enacted in 2007. The aim of the reforms was to expand health insurance coverage under the Working Families and Small Business Health Coverage Act. The law mandated a Medicaid expansion and a premium subsidy program for small businesses in order to provide health insurance coverage to approximately 100,000 previously uninsured Maryland residents.[i]

Maryland will phase in its Medicaid expansion over several years. The first phase, called the Medical Assistance to Families program, increases Medicaid eligibility for parents from 30 to 116 percent FPL ($20,500 for a family of three).[ii] To date, more than 16,000 parents and caretaker relatives have enrolled. The second phase of the Medicaid expansion increases the services offered under the Primary Adult Care (PAC) program. The program will continue to be available to any eligible individual, though the state may have to cap it at some point because of budget constraints. PAC, which for the past few years has provided basic primary care services to low-income adults, will—over the next three years—add benefits such as hospitalization and low-cost or free prescriptions. The goal is to increase the benefit package over a number of years until PAC beneficiaries receive full Medicaid benefits. These benefits would be phased in over a number of years.
The law also creates the Health Insurance Partnership, a premium subsidy program for small businesses that began enrollment in October 2008. A business is eligible to receive a subsidy of up to 50 percent of the premium from the Maryland Health Care Commission if it meets the following criteria:
  • The business has between two and nine employees;
  • The average employee wage is below $50,000;
  • The employer establishes a Section 125 Plan; and
  • The employer did not offer health insurance to employees during the 12 months before applying for the subsidy.[iii]
The Maryland Health Care Commission is responsible for administering the partnership program. It provides assistance to employers establishing Section 125 plans and expects to enroll more than 1,500 businesses in the program’s first year.[iv] As of December 1, 2008, more than 80 businesses had enrolled, covering 420 lives. For a health plan to be eligible for a subsidy, it must encourage wellness by providing employees with a health risk assessment and incentives for health-promoting activities, preventive care, and chronic care management.[v]

[i] “GovernorO’Malley Celebrates Enactment of Health Care Expansion; Encourages Families to Enroll,” Office of Maryland Governor Martin O’Malley, press release, July 7, 2008; Maryland Begins Implementation of Reforms,” St@teside, State Coverage Initiatives, July 2008, available at
[ii] Ibid.
[iii] “Governor O’Malley Unveils Health Insurance Partnership for Small Business” op. cit.
[iv] Health Insurance Partnership Web site,
[v] Ibid.