Del. Shane Pendergrass, the Howard County Democrat who chairs the Health and Government Operations Committee, works quietly and efficiently, shunning most publicity, on some of the biggest (and most boring) issues in government involving health care and health insurance.
A few weeks ago, Pendergrass, whom I’ve known since she entered local politics 33 years ago, told me on the floor of the House that she was happiest about resolving the most important issue of the session — how to help those in the individual health insurance market who were getting slammed by skyrocketing premiums, due to loss of federal subsidies.
It sounded like one of those dull, but significant, issues that get little attention from reporters, as they prefer drama and controversy. Turns out it was a good, even surprising, story that everybody in the media paid no attention to; that is, until it passed the House of Delegates in the flurry of hundreds of bills debated in marathon sessions by the March 19 crossover deadline. Bills passed in the House or Senate by that date are guaranteed at least a hearing in the other chamber.
It was a story of real bipartisan cooperation and compromise, with nobody trying to grab headlines. The tax-loathing Hogan administration even agreed to a one-year $300 million tax hike on the insurance industry.
Short titles for bills often don’t tell you much, but this one sounded like a real snoozer — Individual Market Stabilization, with a subtitle of Maryland Health Care Access Act of 2018. Pendergrass’s committee has been working on the issue for a year, after the loss of federal subsidies for some individual and family policies through the Health Benefit Exchanges. Middle income folks — household incomes above $70,000 not covered by employer plans — were seeing health insurance costs rising to thousands of dollars a month. About 150,000 Marylanders had health insurance costs so high that the only option seemed to drop health insurance altogether.
All the legislators, both Democrats and Republicans, were hearing from constituents whose health care premiums were now higher than their mortgages. The Hogan administration engaged early on in the work groups, as officials tried to find at least a temporary solution until the state could set up its own reinsurance program with another pot of federal funds, the subject of a companion bill.
The Hogan administration and the legislators found themselves scrambling to protect constituents from some of the fallout of Congress’s failure to fix or replace Obamacare, the Affordable Care Act.
Gov. Hogan “worked the House and the Senate every step of the way,” Pendergrass told her House colleagues in floor debate March 19. “All of the stakeholders were involved. We listened to what the governor had to say.”
As originally introduced late in February, the bill contained an individual mandate to buy health insurance with penalties for those who didn’t. For Republicans, that was one of the most pernicious provisions of the federal ACA.
“We took out the mandate because the governor said take out the mandate. We compromised,” Pendergrass said.
There was also a tax on hospital earnings, a method the state had used in the past to raise health care revenues. Hogan’s health secretary, former Anne Arundel County Executive Robert Neall, asked for that to be removed. The legislators agreed.
The solution was the federal tax on insurance companies that had been imposed by the original ACA. But Congress gave the companies a reprieve next year, and the legislators decided that an equivalent state tax could generate about $300 million to keep premiums for the individual market from escalating.
“We do not have the option to do nothing,” Del. Joseline Pena-Melnyk, the subcommittee chair who worked on the bill, told her House colleagues. “Are we all going to pay for it? Yes,” she said, whether through increased premiums from the other health insurers or because of the uncompensated hospital care from the families who drop their insurance. That cost of that care is spread to everyone through increased hospital rates.
The only voice in opposition on the House floor was Del. Herb McMillan of Annapolis, who said, “The best [the bill] can do is to stabilize failure.” (Look for more on maverick McMillan in the Anne Arundel column.)
The bill eventually passed 91-47, with most Republicans silently opposed, despite the governor’s support for the bill. Its fate now rests with the Senate.
“Thank you to the administration for all the help they gave us,” Pendergrass said.
Ed’s Final Budget
Senators heaped bipartisan praise on Budget Committee Chairman Ed Kasemeyer, the Howard County Democrat who is retiring from the Senate. He got three standing ovations from his colleagues as he presented the $44.5 billion budget.
“It’s one of the best budgets I’ve seen since I’ve been here,” said Sen. George Edwards, the three-term Republican from the mountains of Western Maryland, praising Kasemeyer for his “effort at bipartisanship.”
The fact that the budget is largely the handiwork of Republican Gov. Hogan helped explain the unanimity of the 13 GOP senators, who made only two brief attempts to amend the work of the Democrat-dominated Budget and Taxation Committee.
Kasemeyer had to defend the committee’s decision to not grant as much tax relief as originally promised to about 9% of Marylanders; they’ll pay slightly more in state and local income taxes due to changes in the federal tax code. The governor wanted to make sure no Marylanders paid more by allowing them to itemize their deductions, even if they didn’t do it on their federal return. Kasemeyer said that wasn’t possible.
“We wanted to be sure to [hold] taxpayers harmless,” he said, but “we don’t go all the way with this bill. … There was no way to make everybody whole,” without costing the state $300 million or more in the long term if all were allowed to itemize.
Franchot in HoCo
Comptroller Peter Franchot is under attack in the legislature for overstepping his authority on beer regulations and school construction, and for political grandstanding in general. But brief stops in Columbia last month showed why he continues to be popular among voters.
He visited Atholton High School and presented an award to the school maintenance chief for keeping up the building, which was renovated in 2015. As a member of the Board of Public Works that authorizes school construction spending. Franchot harps on school maintenance as a way to reduce long-term costs.
A bill moving through the legislature wants to cut Franchot and Hogan out of any oversight on school construction spending because of how they used their power to challenge local officials.
Franchot then awarded several proclamations, including one to a nonprofit group involved in assisting victims of sexual assault and domestic violence, and another to a group that helps people manage their finances better.
Some legislators make fun of these awards, but when you see how enthusiastically awardees react to some positive attention from a statewide official, you can see why Franchot has more friends than enemies among voters.
Franchot and his team deliberately antagonized members of the legislature with his own task force and legislation to reduce regulations on the budding craft beer industry. Last year, the legislature had put together a compromise between the local brewers, distributors and retailers, a compromise none of the parties were happy with.
The legislature is set to pass a bill creating a task force to study how the comptroller regulates and enforces its alcohol laws. Howard County Del. Warren Miller is co-sponsor of the bill that is in direct response to Franchot’s efforts to change the state’s beer regime.