Maryland Democrats Raise Healthcare Cost with Tax

Democrats who's mantra of healthcare for everyone have caused the premiums of Maryland
Citizens to increase because of a 2% tax on HMOs.

The 2 percent tax on HMO premiums, which the General Assembly passed over Gov. Robert L. Ehrlich Jr.'s veto, will cost a family of four about $200 more a year.

"Unfortunately, patients in Maryland, not the tax-and-spend General Assembly leadership, are the only ones who will pay for this costly lesson in basic common-sense economics," said Sen. Andrew P. Harris, Baltimore County Republican and the Senate's only physician.

However, House Speaker Michael E. Bush said the tax succeeded in stopping the increases in malpractice-insurance rates that purportedly threatened to drive doctors out of business.

The reason for malpractice premiums becoming so expensive is the volume of suits filed which cost doctor's insurance companies regardless of the merit of the complaint. Juries often award settlements that are beyond proportion to damage or risk. The insurance companies will settle a meritless suit out of court because it is less expensive than to fight in court. To subsidize the premiums for malpractice insurance only subsidizes the personal injury lawyers, a key Democrat contributor.

Medical Mutual Liability Insurance Society of Maryland -- the state's largest insurer of doctors -- increased rates 66.8 percent since 2003, but has not filed for a rate increase for next year.

The company collected more than $27 million this year from the subsidy funded by the HMO tax, according to the Maryland Insurance Administration, which administers the fund.

The fund stops subsidizing medical-malpractice insurance in two years, but HMOs will keep paying the tax into a Medicaid fund that now gets only some of the tax.

As is typical of most plans to use a tax as a remedy to a problem this one will not only not solve the problem, but cease to even pretend to address it by reverting to general funds in two years. The malpractice premiums will no longer be subsidized, the cost of HMOs will still reflect the tax and healthcare in Maryland will continue to increase rapidly.

The relatively small Delmarva Health Plan Inc. and Elder Health Maryland have not passed on the tax through higher rates. Neither has the 150,000-member Kaiser Foundation Health Plan, which isn't taxed because of its nonprofit status but still pays an equivalent amount into the Medicaid fund. Emphasis mine.

The tax cost CareFirst nearly $20 million this year.

The complete nonsense of the statement highlighted above is remarkable. Not calling money contributed to the fund a tax but a contribution is an example of the Orwelian goofiness government engages in because the politicians think the people are stupid. Call it what you want the results are the same. Give Maryland Democrats a wood shampoo for picking the people's pockets to subsidize a special interest while pretending to solve a problem resulting from the states own tort law rules.

Find more nonsense at Carnival of the Clueless

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