Md. Democrats shift blame

Maryland Democratic leaders yesterday blamed the Republican state insurance commissioner for health maintenance organizations increasing their premiums and not a new tax the Democratic-controlled legislature levied on HMOs this month.

But HMO officials said they are raising their rates to pass on to their customers the 2 percent tax enacted by the General Assembly two weeks ago.

Senate President Thomas V. Mike Miller Jr. and House Speaker Michael E. Busch yesterday called for the resignation of Insurance Commissioner Alfred W. Redmer Jr., saying his recent bulletin encouraged HMOs to raise their rates.

“What we need in that position is a watchdog and not a lapdog,” said Mr. Miller, a Prince George’s Democrat and trial lawyer.

“I call for the insurance commissioner to do his job,” said Mr. Busch, Anne Arundel Democrat. “And if he doesn’t do that, I think we have no other choice than to call for his resignation.”

Mr. Miller and Mr. Busch said Mr. Redmer was politically motivated in posting a bulletin that said HMOs could pass on to their customers a 2 percent tax on premiums if they notify the Maryland Insurance Administration in writing of the intentions.

The bulletin was posted on the independent agency’s Web site (www.mdinsurance.state.md.us) on Jan. 13, two days after Democratic lawmakers overrode Gov. Robert L. Ehrlich Jr.’s veto of a medical malpractice insurance reform bill that included the HMO tax.

Mr. Ehrlich, a Republican, had warned against levying the tax, saying HMOs would pass it on to “those who can least afford to pay it.”

Yesterday, Aetna Inc. of Hartford, Conn., said it was passing the 2 percent tax on to some of its HMO customers in Maryland because it had not planned for a tax when originally pricing its HMO premiums.

“The tax was not built into the premiums we developed,” Aetna spokesman Walter Cherniak said.

Aetna’s higher premiums — which will affect about 130,000 of the company’s 200,000 Maryland customers — will take effect March 1, as will those of Mid-Atlantic Medical Services LLC, the health care provider commonly known as MAMSI.

MAMSI spokeswoman Beth Sammis said the company will increase premium rates by 2 percent but declined to say how many customers would be affected.

Democratic leaders said yesterday that Mr. Redmer’s bulletin gave HMOs permission to raise rates and that he did not stand up for Maryland consumers.

However, a legal opinion from the state’s attorney general’s office found no wrongdoing in the Redmer bulletin.

The opinion suggests that the insurance administration’s “better legal course” would have been to implement a regulation allowing it to grant approvals by notification or else adhere to its standard process of assessing individual requests from insurance companies.

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