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First Click, Maryland -- An election-year Rx

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Monday, July 26, 2010:

The Agenda
Aaron.jpgMaryland Democrats' strong support for President Obama's health-care overhaul -- and in the 1st Congressional District, Democratic Rep. Frank Kratovil's opposition -- will be an important subtext in races up and down the November ballot.

A year ago, thousands of angry Maryland voters packed gymnasiums and school auditoriums from Hagerstown to Salisbury to take a number to yell about which way their representatives should vote (most who did the yelling wanted a vote against the bill).

Since it passed in March, the state's Tea Party has held modest rallies in opposition, but Marylanders' outward expressions of dissatisfaction have subsided, and polls show more than half of voters support the measure, (while still remaining concerned about its costs).

Now, a report out by Gov. Martin O'Malley's (D) administration is likely to form the basis for election-year debate about whether the overhaul amounts to a good thing or bad thing for the state.

The report released Monday by a council that O'Malley formed to oversee the state's implementation of the federal health-care overhaul built a financial model that largely confirms a claim he made in March that the bill would produce $1 billion in savings for Maryland over the next 10 years.

Maryland's Health Care Reform Coordinating Council says the state's projected savings between fiscal 2011 and 2020 is $829 million -- the midway point in a projected range of $622 million to $1.04 billion in savings.

Leading up to the report's release, O'Malley's likely Republican challenger, former governor Robert L. Ehrlich Jr., has accused the governor of inflating potential savings and underestimating its costs, and Ehrlich said O'Malley had yet to prove his case with numbers.

The report, based on research by the nonpartisan Hilltop Institute of the University of Maryland, Baltimore County, provides some real grist for debate:

For starters, it estimates that the bill will encourage people who are eligible for Medicaid but who haven't yet enrolled to come out of the woodwork and cost the state $675 million over the remainder of the decade. Expansion of Medicaid benefits will cost the state an additional $126 million, and the cost to the state as an employer will also jump $155 million because Maryland will have to cover dependent children of its 75,000-worker payroll through age 26.

On the positive side of the balance sheet, the model assumes more than $1 billion in savings because it says Maryland will no longer need its high-risk pool for those who can't obtain insurance through other means. It also says the state will save $311 million because the federal government will pick up a greater share of health-care costs for low-income children not covered by Mediciad. And an additional $232 million will come from better pharmacy drug pricing under Medicaid.

That's the good news. The bad news is that when the federal government's aid to states begins to subside, costs begin to increase. In 2020, the state would pay $46 million more than it would have otherwise for health-care costs. And costs could rise each year thereafter.

In that way, 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 it warned that because of the state's increased costs in 2020, "the state must focus on bending the cost curve early in order to improve the outlook at the end of the decade."

John Colmers, secretary of Maryland's Department of Health and Mental Hygiene, recently cautioned that the report and its financial model provide just a first snapshot of costs and savings.

"There are assumptions that are built in here that are simply that: assumptions," Colmers said. "We expect that those assumptions will change over time."

-- Aaron C. Davis


News You Should Know

Seventeen challengers seeking to oust Sen. Mikulski
Mikulski looks left.jpg"Most people are familiar with what it takes to make a real run for president: months of work, hordes of volunteers and dozens of trips to Iowa and New Hampshire. But what about running for the U.S. Senate from Maryland? No campaign workers are necessary to get on the primary ballot, and neither are petitions or even yard signs. Just a check for less than $300 -- about what it costs to buy the latest iPhone -- and a desire to be heard," writes The Post's Ben Pershing. "That low barrier to entry helps explain why 18 candidates are seeking the Republican or Democratic nominations to represent Maryland in the Senate this year, including Sen. Barbara A. Mikulski (D), who is widely expected to win her fifth term."

Ehrlich mines Md. aggravations for votes in governor's race
Ehrlich-campaign.jpg"While Gov. Martin O'Malley (D) has begun his campaign for reelection with a round of radio and television ads, Ehrlich has adopted a less-noticeable strategy: seizing on a number of pockets of discontent to try to capitalize, a handful of voters at a time, on dissatisfaction with his successor," writes The Post's John Wagner. "Although O'Malley has enjoyed generally positive job-approval ratings, his tenure has included numerous rounds of budget cuts and plenty of policy calls that have angered particular groups. That has created ample targets for Ehrlich, who has managed to put O'Malley on the defensive in several cases, including over what has become known as the 'hell train' that stalled in June on the Penn Line."

2010's battlegrounds are in races for governor
"In this high-stakes election of 2010, much attention naturally focuses on Republican efforts to come back in Congress and the Democrats' drive to retain their large majorities in the House and Senate. But for those gauging the long-term health of the two parties, nothing is more important than the fight for control of the 37 governorships and the legislatures on the ballot this November," writes Post columnist David S. Broder. "The incumbent Democratic governors of New Hampshire, Massachusetts and Maryland all face credible opponents in their bids to extend their terms. Only in New York, where state Attorney General Andrew Cuomo is poised to succeed retiring interim Gov. David Paterson, did the Republicans fail to come up with a strong contender."

Editorial: 'The Cheap Drunk State'
Washington Post editorial writers take Maryland to task for not raising taxes on alcohol in decades:
"There's no reason to take seriously the dire warnings about Maryland's looming deficits unless taxpayers are confident that state officials are at least doing the relatively easy things to produce revenue and cut costs. The problem is that Annapolis has shrunk from some of those easy measures, even while lately taking more painful steps such as raising tuition for higher education. The most glaring example is lawmakers' distaste for raising tens of millions of dollars by increasing the tax on alcohol to something at least approaching the national average."

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Trust First Click for critical news and analysis you need to navigate Maryland politics. Each Monday and Thursday, First Click brings you The Agenda, a concise, forward-looking analysis of a top development in politics or policy. "News You Should Know" breaks down top stories from across the state. And other features keep you up to speed with power brokers in Annapolis and beyond. Want First Click on the go? Sign up for our free e-mail edition, and get the news delivered to your inbox or mobile device.

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By Aaron C. Davis  |  July 26, 2010; 9:01 AM ET
Categories:  First Click  
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Next: O'Malley lead over Ehrlich dwindles in new poll

Comments

The health insurance law is a flawed economic design that transfers costs to the back of everyday Americans while not saving money on health care spending - http://disenchantedjourno.blogspot.com/2010/07/thought-of-day-old-still-want-your-tax.html

Posted by: DJOURNO | July 27, 2010 11:40 AM | Report abuse

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