Health Care Changes Expected to Save Maryland, Cost Virginia Money

By Rebecca Blatt

States are releasing their estimates of how much the new federal health care law will cost them. Virginia says it will amount to about $1 billion dollars over the next decade or so, but Maryland says the law will save it about $1 billion.

The key to the difference is the fact that Maryland already offers relatively generous benefits, while Virginia does not. For instance, to the tune of approximately $100 million a year, Maryland subsidizes insurance for high-risk people. John Colmers, Maryland's Secretary for Health and Mental Hygiene, says that will change.

"We will not have to do that when the insurance rules are rewritten to eliminate pre-existing condition restrictions," says Colmers.

There will be some cost to the new federal law. But Colmers says reductions in other services will more than make up for it in Maryland.

Not so in Virginia. Medicaid, the health insurance program for the poor, will be the Commonwealth's biggest expense. Virginia will have to cover many people who already would be covered in Maryland.

Joan Alker, co-executive director of Georgetown University's Center for Children and Families, says there are upsides to that. The federal government will pay for almost all the expansion.

"So for a state like Virginia, that has not been as generous as a state like Maryland in its coverage, they'll actually get more federal dollars and benefit more from the reform bill," says Alker.

But they’ll also have to pay more. That’s why the new law may cost Virginia money and save it for Maryland at the same time.