2% tax or 33% premium increase?

If Governor Bob Ehrlich is Superman (he’s not to anyone not the national Republican Party), then it stands to reason that taxes are his kryptonite. And so far it seems the motivating reason behind his failure to help protect doctors from rising insurance premiums is a proposed tax on HMOs.

In yesterday’s Baltimore Sun, Michael Olesker writes:

[Maryland Governor Bob Ehrlich] called a special legislative session to get financial help for doctors being crushed by insurance costs. Some of the talk was pretty scary. Legislators from rural counties, in particular, lamented the plight of sickly constituents looking for doctors. But too many doctors, they said, have given up their practices and vanished from the map rather than face rising malpractice costs.

Then there was Busch, pausing for a few moments in his speaker’s office as Wednesday’s long day of debate and compromise drifted exhaustingly into Thursday’s pre-dawn hours. Busch talked about a University of Maryland Medical School where concerns over insurance costs are so deep that not a single 2003 graduate specialized in obstetrics and gynecology. (In 2004, university officials said yesterday, they had “one or two” ob-gyn grads in a class of about 130.)

Thus, in yesterday’s dark morning hours, the House and Senate passed a bill to keep malpractice costs in check, and Ehrlich prepared to turn his back on it. We go by the governor’s words on this, though he has not stamped his official veto as this is written.

Never mind that the General Assembly measure would limit doctors’ insurance premium increases to 5 percent in the coming year, instead of the 33 percent increase they face beginning tomorrow. Never mind that medical authorities (including the Maryland Hospital Association) say that proposed legislative reforms would make patients safer, change the way courts award damages for injuries and improper care, and discipline negligent doctors.

What appears to burn Ehrlich, and has prompted him to repeatedly declare that he will veto the legislation, is the 2 percent tax to be levied on health maintenance organization premiums. This, in turn, sent Busch into a third-degree burn.

“Health care people have to be astonished,” Busch said, striding into his speaker’s office and ripping off his coat in exasperation. “Here’s a perfect opportunity for this governor to step up and come to a compromise. Instead, he lets an HMO tax stand in the way.

“Gosh,” Busch said, the sarcasm filling each syllable he uttered, “what a unique concept – HMOs helping to cover health care costs.”

What this means is that Monday he’ll be on WBAL bitching and moaning about how he couldn’t let them evil Demoncrats tax the HMOs, and now we’re all going to die because all the doctors are going to move away. Or, as Olesker would say, “he’s snatching defeat from the jaws of victory.”

Hey, look on the bright side – when people start dying, the roads won’t be as congested! Yes!

0 thoughts on “2% tax or 33% premium increase?

  1. I had not paid attention to this story, but I have to admit that in my reading of it I am a bit disgusted by our governor. He calls a special session, just after the holiday, and in typical Ehrlich fashion he delivers his proposal just before the session begins. His Washington experience says that this works, but since you are a governor whose party differs from that of most of the legislature, compromise is needed.

    I would like to know the reaction of different doctors to this legislation. I think more is needed–especially on the award side of malpractice. Nonetheless, this is the right step as it allows doctors who would be forced to close shop some assistance to pay their premiums.

  2. I’m glad you brought this up too. The gift tax worked for Hopkins when we were faced with huge levies – I certainly think it’s worth a shot for the HMOs – and YES, they need to shoulder some burden. I am convinced that you can’t have torte reform on this issue without the insurance reform to go with it. Erlich needs to stick his hand out and make an effort, or risk having it bit off.