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Nov/Dec 2007

New State Health Reforms Enacted

Maryland: On November 19, 2007, Governor Martin O’Malley (D) signed the Working Families and Small Business Health Coverage Act that will offer subsidies to small businesses to offset the cost of providing coverage to employers and expand Medicaid eligibility to certain adult populations. Provisions included in the new law include:

  • The provision of subsidies to small employers and employees of small employers if the employer:
    - has not offered a health benefit plan within the prior 12 months;
    - has two to nine eligible employees;
    - meets certain low-wage requirements to be established through regulation;
    - establishes a Section 125 payroll deduction plan to allow for pre-tax premium contributions; and
    - agrees to offer a wellness benefit that is designed to prevent disease, reduce poor clinical outcomes, and promote health behaviors and lifestyle choices.
  • The expansion of Medicaid eligibility up to 116 percent of the Federal Poverty Level (FPL) for parents and caretaker relatives with a dependent child living at home;
  • The phase-in over four years of Medicaid eligibility up to 116 percent FPL for childless adults—enrollment may be capped and benefits may be limited based on available funding; and
  • The legislation is financed through a combination of general funds, hospital uncompensated care savings, a one-time surplus from the state's high risk pool, and federal funds. The availability of general funds for the childless adult expansion depends on the adoption, through public referendum, to add a new article to the Maryland Constitution to authorize video lottery terminal gaming (slot machines) in the state.

In addition, the governor, through an October executive order, created the Maryland Health Quality and Cost Council. The Council is charged with:

  • Coordinating and facilitating collaboration on health care quality improvement and cost containment initiatives by the various stakeholders in the health care system;
  • Making recommendations on health care quality and cost containment initiatives and priorities to policy makers, state and local governmental entities, professional boards, the Maryland Patient Safety Center, industry groups, consumers, and other stakeholders;
  • Developing a chronic care management plan to improve the quality and cost-effectiveness of care for individuals with, or at risk for, chronic disease;
  • Facilitating the integration of health information technology in health care systems; and
  • Examining and making recommendations regarding other issues relating generally to the Council’s mission to improve health care quality and reduce costs.

Wisconsin: Governor Jim Doyle (D) reached agreement in October on a state budget that would increase the cigarette tax by $1 per pack, providing funding to expand health care coverage to nearly all children in the state. Children would be covered through the state’s new BadgerCare Plus program, which merges Family Medicaid, BadgerCare, and Healthy Start to form a comprehensive health insurance program for low income children and families.

A recent state survey found that about 71,000 children in the state were uninsured at some point in time during 2006. Under BadgerCare Plus, families with incomes that exceed eligibility for current public programs will be able to purchase basic health coverage for their children for $10 to $68.53 a month, depending on their income. Wisconsin plans to subsidize premium costs for those families with incomes up to 300 percent FPL. Families with incomes above 300 percent FPL will be required to contribute the full cost of coverage.

The Centers for Medicare and Medicaid Services (CMS) has approved the waiver to allow the program to move forward and enrollment will start on February 1, 2008.