Marylanders earn too little for health insurance coverage

Marylanders are not getting paid enough to cover their health insurance, making the need for reform even more urgent, according to a new report.

The report, prepared by officials from Health Care for America Now, a national advocacy group, documented how rising health premiums are straining Maryland residents and businesses.

Maryland was one of 40 states to receive a report.

The average premium for family coverage in Maryland was $13,068 last year, and it is expected to reach nearly $24,000 by 2016, according to the report.

Projections have shown that the federal economic stimulus bill will bring $3.8 billion to the state over a 27-month period, with about $1.3 billion for Medicaid, a federal health program for families with low incomes.

"The economic recovery bill is a big help, but it's not enough. … Costs have gotten out of control," said Matthew Weinstein, Maryland coordinator for the organization. "Even people who have good health coverage can't afford the rising premiums."

From 2000 to 2007, health insurance premiums in Maryland increased by more than 64 percent, while median yearly wages rose 21 percent. In 2007 the median annual wage in Maryland was $36,723 and the average health care premium for a family was nearly $12,000, according to the report, which did not make specific recommendations on what other reforms are needed.

Also in 2007, 19 percent of all state spending went toward Medicaid and the State Children's Health Insurance Program. There are about 20,000 Anne Arundel County children enrolled in the plan, which provides coverage for children and pregnant women who meet income guidelines.

The tough economic conditions also have filtered down to those who provide health care. In 2005, nurse practitioner Sandi Shanahan opened a weekly free clinic in Annapolis to aid uninsured children in the county. Her workload has increased, but financial contributions have not.

"We get some grants and I ask each family to donate $35 when they come," Shanahan said.

"Most of the families have been able to do that, but now we're getting donations of $5 and $10."

The report also painted a bleak picture for Maryland business owners, saying that the rising cost of premiums endangers the livelihoods of 66 percent of employers in the state who provide health insurance. Companies spend an average of $8,341 per year per employee for family coverage, the report stated.

The 17 employees who work at Chesapeake Consulting Inc. in Severna Park have health insurance benefits, but it has not been easy for owner John Covington to supply them. The costs have continued to rise and he's considered switching to a boutique insurance plan, which provides services for a flat fee, or moving his business out of the state altogether.

"I have absolutely no confidence in the (state) legislature or the health insurance companies in Maryland to improve the situation," Covington said, adding that the situation is dire in several other states as well. "Over a 30-year period of time, we somehow managed to take something that used to work and messed it up."