Mixed bag for docs, students

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The $39 billion budget proposal unveiled today by Gov. Martin O’Malley includes some good news for Maryland’s physicians and students but also some slaps in the face.

The most obvious stinger is the 3 percent tuition hike at the 12 colleges in the University System of Maryland. (For one tongue-in-cheek solution to this predicament, see my blog post from yesterday about “Sugar Scholarships.”)

At Morgan State University and St. Mary’s College, tuition would be frozen.

Despite the tuition increase, O’Malley emphasized that the cost of college is higher — and growing faster — in other states than in Maryland. His budget uses those tuition dollars to invest more money in the state’s community colleges and its public universities (including the two that weren’t given tuition increases).

O’Malley’s budget proposal also includes new money for public school construction ($286 million) and pre-kindergarten programs ($4.3 million).

The budget, which includes $457 in net spending reductions, also limits rate increases for most health and human service providers, and it defers some rate increases by six months. That saves $61 million.

However, the budget did allocate $42 million to increase the rates the state will pay to primary care physicians and psychiatrists who treat Medicaid patients. The Medicaid reimbursement rates were increased to match the Medicare reimbursement rates (as a way to encourage docs to accept Medicaid patients).

Also, because Maryland chose to expand the Medicaid program and cover more people (it was given the option to do so under the Affordable Care Act), spending on the program would increase by $8.9 billion in 2015, a 22 percent increase over fiscal 2014. Medicaid makes up 71 percent of the health department’s budget.

The budget would also funnel more money to state health departments than in fiscal 2014.

O’Malley’s budget sets aside $11.4 billion for the Dept. of Health and Mental Hygiene, a 9.7 percent increase from fiscal 2014. Health accounts for 29 percent of total expenditures, the largest portion of the budget, which also allocates $5.9 billion to higher education, an increase of 3 percent year-over-year. Higher education is the third largest chunk of spending.

Related: Mission Failure: O’Malley budget won’t erase structural deficit