Hogan-Backed Insurance ‘Fee-Slash-Tax’ Advances, Despite GOP Opposition

House Democrats voted Thursday to extend a tax on health insurance companies that has been credited with keeping Maryland’s individual health insurance market afloat.

The administration of Gov. Lawrence J. Hogan Jr. (R) has asked the General Assembly to keep in place a 1% “provider fee” for five more years.

Advocates contend that without revenues generated by the fee, premiums for individual health insurance policies would be too expensive for many consumers. That would leave an insurance market filled mostly with people who have costly long-term illnesses.

The measure to extend the fee was approved on a party-line vote, 97-40. Despite the success Maryland has had in preventing its individual market from imploding — and the political cover provided by Hogan’s support for House Bill 413 — Republicans voted against it.

House Minority Leader Jason C. Buckel (R-Allegany) expressed concern that the fee results in higher premiums for people covered by group plans. “Essentially this is the imposition of a tax — a fairly significant tax — upon certain other elements of society,” he said.

Del. Bonnie Cullison (D-Montgomery), chair of a Health and Government Operations subcommittee, called the measure essential. “This is really an insurance fund for insurance companies,” she said.

“Every commercial carrier in the market taps into this fund” when individuals require expensive care, she added. “Yes, it is a ‘fee-slash-tax’ that is passed on to the consumer… (but) the individual market is stabilized and premiums have gone down. And, enrollment has increased.”

In addition to the $570 million the fee has generated over three years, Maryland has been able to tap $1.3 billion in additional federal funds, Cullison said.

The Senate has yet to act on a cross-filed bill. Senate Bill 395 has nine co-sponsors, all Republicans.

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