- The Washington Times - Wednesday, January 5, 2005

ANNAPOLIS — Gov. Robert L. Ehrlich Jr. yesterday said he will tap the state’s general fund to subsidize an increase in doctors’ malpractice insurance premiums and veto the General Assembly’s bill on the issue Monday.

Mr. Ehrlich, a Republican, dismissed the Democratic-controlled legislature’s malpractice insurance reform bill, which includes lifting a tax exemption on health maintenance organizations (HMOs) to fund the short-term subsidy. He said HMOs would pass the cost of the tax on to their customers.

“It is a pass-through tax on the people who can least afford it,” said Mr. Ehrlich, who has long opposed lifting the HMO tax exemption. “As a result, it is a very easy veto.”

Democratic leaders have said they have enough votes to override the governor’s expected veto. The General Assembly reconvenes Tuesday.

Mr. Ehrlich, who called for a special legislative session on malpractice insurance reform last month, said yesterday that the state has earmarked $30 million from the general fund to reduce a 33 percent increase in malpractice insurance premiums. He plans to introduce his budget Jan. 19.

He also said the general fund will supply $18.5 million in Medicaid reimbursements to help doctors in five high-risk specialities reduce their insurance premiums.

“The one thing I can control unilaterally is Medicaid reimbursement, and we have included that in our budget,” he said.

The Medicaid reimbursements will total $37 million when the federal government matches the state’s payment dollar for dollar.

The General Assembly’s bill would lift a 2 percent tax on HMO insurance premiums to provide as much as $64 million for the doctors’ subsidy.

House Speaker Michael. E. Busch and Senate President Thomas V. Mike Miller Jr., both Democrats, could not be reached for comment.

Groups representing doctors and hospitals on Tuesday asked the governor to approve the General Assembly’s bill, saying they will help lawmakers override his veto.

Willarda V. Edwards, president of the Maryland State Medical Society (Med Chi), said the bill does not go far enough toward reducing the cost of malpractice lawsuits, but “it does offer important positive elements that we cannot walk away from, given the need to assure access to health care to the citizens of Maryland.”

Doctors have said the higher insurance premiums would force them out of business or out of the state.

Mr. Ehrlich remained adamant about the veto, saying the General Assembly bill “contains such a minimal amount of reform, it is next to nothing.”

Citing a study conducted for the administration but not made public, Mr. Ehrlich said for most doctors, the legislature’s bill would reduce premiums by only 2.9 percent the first year.

He said he did not know how that compared with the savings in the bill he originally proposed because he did not have his bill “scored” to determine the potential reductions in premiums.

Mr. Ehrlich also could not say how much the savings from the legislative bill would be in future years. Both the administration and legislative leaders have said in the past that there would be little impact in the beginning but that savings would grow as the effects of the changes in the law take effect.

Yesterday, the governor addressed the medical groups’ support of the General Assembly plan.

“They like the cash because, obviously, a lot of them feel pressure. … I understand that motivation,” Mr. Ehrlich said. “But my line has to be not just the short term but the long term.”

This article is based in part on wire service reports.

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