Maryland sees savings in federal health law, for a while at least

Maryland could spend $829 million less than expected on health care between next year and 2020 because of the federal health overhaul law, according to an analysis by a state-convened committee, The Associated Press/Washington Post reports. "The savings, however, last only until the end of the decade, when the federal law shifts a greater share of financial responsibility for Medicaid expansion to the states." The analysis was produced by the state's Health Care Reform Coordinating Council, a panel created by Gov. Martin O'Malley in March (Witte, 7/26).

The Baltimore Sun: In addition to saving money, the overhaul law will expand coverage to 350,000 Marylanders, according to the report, about half of those who would otherwise be uninsured, . "The savings will be achieved by supplanting state spending with increased federal funding for health care programs for those who can't afford it. … As more people get health insurance, the state also expects to see declines in uncompensated care. The cost of treating the uninsured who seek treatment and can't pay the bill is incorporated into hospital rates paid by private insurers and Medicaid. So as more people get insurance, the state is expected to save" (Walker, 7/26).

"But those savings are expected to be wiped out by rising costs," the Maryland Reporter writes. "I won't sugarcoat it … health expenditures in Maryland will exceed the $829 million in savings," said Lt. Gov. Anthony Brown as the report was released. The Maryland Reporter also writes, "After 2020, which is as far as the council's projections go, 'it depends on how well we bend that cost curve' as to the ultimate savings to the state, said O'Malley. He referred to items like reducing redundant tests and increasing the availability of nutritional information (Pash, 7/26).

The report suggests some ways to bend the curve, as O'Malley puts it, The Hill reports, such as "increasing access to primary care doctors, getting hospitals and physicians' offices to adopt electronic health records and reducing hospital-acquired infections" (Pecquet, 7/26).

The Washington Post Maryland Politics Blog: The report "sheds light on differences in health-care cost estimates between Maryland and Virginia, where Republicans have steadfastly opposed the federal health-care law and say it will cost residents almost $1.5 billion in coming years. Virginia's estimate includes expenses through 2022, meaning it accounts for two full years when the state will be paying a greater share beginning in 2020. Nearly 40 percent of Virginia's 12-year cost estimate comes in those two years. Maryland's health-care council was conservative in its accounting" and looked for ways to bend the cost curve (Davis, 7/26).