Next Up in Maryland: Universal Health Mandate?

Published October 1, 2006

Since a federal court struck down its “Wal-Mart law” in July, Maryland has been considering other ways of making sure all of the state’s residents have health insurance–including the possibility of adopting a universal health coverage mandate like that of Massachusetts.

In April, Massachusetts passed and the governor signed a law requiring all residents to buy health insurance or face legal penalties–a move other states are watching closely to see how it’s implemented. The law calls for all uninsured adults in the state to buy some kind of insurance policy by July 1, 2007 or pay a fine. Choices include a range of new and inexpensive plans from private insurers subsidized by the state.

But crafting a similar law for Maryland isn’t likely to be problem-free, said John R. Graham, director of health care studies at the Pacific Research Institute in San Francisco and editor of the new book, What States Can Do to Reform Health Care: A Free-Market Primer.

“The state cannot solve the problem of the uninsured by simply ordering people to become insured, either through their employers or themselves,” Graham said. “It must reduce the cost of health insurance. Maryland must examine its policies that increase the cost of health insurance unnecessarily. These include mandates and restrictions on insurers’ ability to medically underwrite policies.”

Wrong Reasons

The Massachusetts plan doesn’t reduce the price of health insurance, and therefore probably won’t be a good model to follow, Graham said.

“At the risk of oversimplification, the Massachusetts plan takes the burden of pricey health care that Maryland sought to impose on Wal-Mart and imposes it on almost all businesses and workers,” Graham said.

Michael Cannon, director of health policy studies at the Cato Institute in Washington, DC, said he believes state regulation is preferable to federal regulation, because policy mistakes made at the state level hurt fewer people.

But Cannon expressed doubt about how helpful new laws based on the Massachusetts plan would turn out to be.

“Rather than pass a law just because another state was able to do so, Maryland might want to wait and see how that law works in practice,” Cannon said. “If, as I predict, it turns out that the Massachusetts law is a colossal disaster that will increase taxes on state residents and allow for unprecedented government intrusion into residents’ lives, Marylanders will be glad they waited.”

As for ideas Maryland should consider when exploring health care reform options, Cannon said, “Deregulate, deregulate, deregulate. Maryland requires her residents to purchase more types of health coverage–whether consumers want the coverage or not–than almost any other state, including coverage for marriage therapists and massage therapists.”

Maryland has 60 mandated benefits, according to the Council for Affordable Health Insurance.

“Those stupid mandates unnecessarily increase the cost of health insurance,” Cannon said. “Annapolis should let Marylanders buy health insurance from other states so that consumers and employers can avoid those unwanted regulatory costs. Annapolis should also rein in Medicaid spending and deregulate providers like nurse practitioners so that low-income families can obtain affordable primary care.”

Interstate Commerce

A bill introduced in Congress last year by U.S. Rep. John Shadegg (R-AZ), the Health Care Choice Act (H.R. 2355), is simple and on the right path, Graham said. Shadegg’s bill, which was slated for a possible House vote in September, would allow consumers to buy health insurance from vendors in any state, not just their own.

Proponents say allowing cross-border insurance sales could vastly reduce the number of uninsured people by allowing residents to move or switch jobs without worrying about losing their health insurance.

Others disagree.

“The so-called Health Care Choice Act would promote a race to the bottom among insurers,” said Ralph Ibson, vice president for government affairs at the National Mental Health Association, a nonprofit group in Alexandria, Virginia that lobbies for mental health coverage mandates in insurance plans.

“The Health Care Choice Act strips consumers of all the protections enacted in their state and allows insurers in the individual market to offer drastically limited ‘bare bones’ coverage and drive up premiums when patients become sick and need more comprehensive care,” Ibson said.

“The real question is whether firms, workers, and insurers should be free to negotiate health insurance policies that are mutually beneficial, or should they be forced to buy policies that the government designs?” Graham said. “The answer, of course, is the former.”

Mary Susan Littlepage ([email protected]) is a freelance writer in Chicago.

For more information …

The text of Rep. John Shadegg’s Health Care Choice Act is available through PolicyBot™, The Heartland Institute’s free online research database. Point your Web browser to, click on the PolicyBot™ button, and search for document #18850.