ANNAPOLIS - A Senate committee gave preliminary approval Wednesday to a $200 million health care expansion, after striking a key provision that would have helped small-business owners pay for health insurance they currently offer.

The bill approved by the state's Senate Finance Committee would expand Medicaid in fiscal 2009 to families earning up to 116 percent of the federal poverty limit, up from the current 35 percent. It would also offer up to $20 million in subsidies to small business owners who want to offer their employees health insurance but currently do not.

The committee scrapped a proposed $10 million subsidy to small business owners who do offer health insurance, "because there are lots of employers doing a good job in providing health care that we aren't going to be giving this subsidy to," said Sen. Thomas Middleton, D-Charles, the chairman of the committee.

The plan, originally proposed by Gov. Martin O'Malley, is designed to expand in future years to cover childless adults earning up to the same 116 percent level as funding is available. Its goal is to provide health insurance to 100,000 of the state's estimated 800,000 uninsured residents.

The administration said it would pay for the initiatives in the first year through a combination of general funds, federal money and a $75 million surplus in the Maryland Health Insurance Plan.

But Sen. E.J. Pipkin, R-Queen Anne's, a vocal opponent of the bill, questioned the administration's decision to expand health care in the midst of a budget shortfall.

"The idea we'd come back to fix the deficit by raising $1.5 billion in taxes and expand health care is outrageous," Pipkin said after voting against the bill in committee Wednesday evening.

Middleton said lawmakers can always come back and trim the bill if O'Malley's plan to balance the budget is not passed. The health insurance bill is scheduled to be heard on the Senate floor Thursday along with major parts of O'Malley's budget proposals.

Democratic Sens. John Astle, Catherine Pugh, Robert Garagiola, George Della, Nathaniel Exum, Delores Kelley, Katherine Klausmeier and Middleton voted in favor of the bill in committee. Sen. Allan Kittleman, R-Howard, voted against it and Sen. J. Robert Hooper, R-Harford, was absent.

Vincent DeMarco, president of the Maryland Citizen's Health Initiative, praised the vote.

"It's definitely a great day for the working people of Maryland," DeMarco said.

The $10 million subsidy cut did not bother DeMarco because "it was going to businesses that already offer health insurance," he said. "It wasn't an expansion."

The committee approved an amendment clarifying that employees are not obligated to participate in the wellness programs that their bosses will have to offer if they want to qualify for state subsidies.

Another amendment, approved 6-4, adds language to the bill saying the state intends to increase access to services for people suffering from Alzheimer's disease and related dementias.

"This is really a matter of are we willing to say what our values are," Kelley said.

Middleton said he worried that the language would prompt other groups with unmet needs to come forward asking for recognition.

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By ANDY ZIEMINSKI, Capital News Service

Copyright © 2007 Capital Gazette Communications, Inc.

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