Analysts Propose Cost Shift Onto Local Health Departments

In the February 1 budget hearing for the Department of Health and Mental Hygiene’s Office of the Secretary, analysts from the Department of Legislative Services proposed a $1.6 million cost shift to local health departments to oblige them to absorb costs of contractual employee health insurance.

The narrative from the DLS presentation explains the rationale:

There are two large increases within the DHMH Administration allowance for fiscal 2018. The first is an increase of $1.6 million to cover the cost of health insurance premiums for contractual employees at local health departments. However, this increase is entirely different from how DHMH and the local health departments cover the cost of health insurance premiums for the regular employees at the local health departments. Normally, these costs would be billed to the local health departments through the budget, and it would be up to each local health department to determine how they would come up with the funds to cover these costs, whether through the funds that they receive through the Core Local Health formula or through any other State or local funds that they receive. The Department of Legislative Services recommends that this cost be covered using the same budgeting methodology as for regular local health department employees, and thus recommends reducing these funds.

If approved, this would further reduce effective state funding for health departments (already subject to a funding freeze at last year’s levels in the budget reconciliation bill), and likely be offset with service cutbacks.