Maryland's hospital rate-setting commission, the Health Services Cost Review Commission (HSCRC), has traditionally allowed third-party payors to pay Maryland hospitals 4% less than the hospitals' approved rates, if the payor offers affordable health care coverage to high risk populations. It was believed that this 4% discount, known as Substantial, Available and Affordable Coverage (SAAC), encourages the provision of health care coverage, and thereby reduces uncompensated care at Maryland hospitals.
In the past, to obtain the SAAC discount, a payor was required to provide annually, at a minimum, an open enrollment period of 60 days, comprised of two 30-day periods at least five months apart. Such open enrollment, required to be advertised to the public, would allow for individuals or families to purchase health insurance coverage, without a medical exam, at a standard, affordable price.
More recently, however, the HSCRC has come to question whether the SAAC policy is providing enough bang for the buck. Following the adoption of new regulations in March, the HSCRC has reviewed the SAAC applications of several third-party payors.
In those cases, the HSCRC has determined that the cost of the SAAC discounts greatly outweighed (in some cases by a factor of ten to one) the hospital savings generated by the open enrollment program. In those cases, the HSCRC has allowed the payors to retain their SAAC discount during a six-month transition period, but has required those payors either (a) to develop a plan to bring the value of the discount in line with the value of hospital savings generated, or (b) to transition out of the SAAC discount program while protecting current enrollees who have purchased the open enrollment product.
Some fear, however, that a severe cut-back in SAAC may result in a loss of the important opportunity for people not affiliated with a group to obtain affordable health care coverage.
In this regard, Maryland's General Assembly this year passed House Bill 43, a measure that establishes a task force to study the non-group health insurance market. This task force will bring to bear the interests and expertise of the Maryland Insurance Administration and the Maryland Health Care Access and Cost Commission to focus on an issue that goes beyond the technical area of hospital rate-setting. A preliminary report is due from the task force in December of 1999, with a final report due a year later.
Perhaps the task force will find ways to bring open enrollment benefits to a larger population, thereby reducing the number of Marylanders without health care insurance coverage. Perhaps the task force will recommend the continuation of some modified version of the SAAC discount. However, absent such a recommendation, it appears for now that, if the SAAC discount is not dead, it is clearly on life-support.