ANNAPOLIS, Md. (AP) — To help steady Maryland’s struggling health care exchange, the state is considering steps some other states have taken to stabilize insurance markets: revive a sort of insurance for insurers.
State lawmakers held hearings on a variety of health care proposals on Wednesday, including one that calls for what’s known as reinsurance, which protects insurers against very high claims. Sen. Thomas Middleton, a Democrat who is sponsoring the bill, said his measure would create a Band-Aid to secure the individual market this year to keep rates down and lay the groundwork for a long-time solution.
Lawmakers are grappling with serious concerns surrounding the state’s health care exchange after CareFirst BlueCross BlueShield raised rates an average of 52 percent for plans bought by individuals on the exchange, which is a marketplace for individuals and small businesses to buy health care. Officials have warned rates could rise again due to the high number of high-risk people under coverage. Only two health insurance carriers participate in Maryland’s health exchange, CareFirst and Kaiser Permanente. That’s down from a high of eight carriers in 2015.
“We’re looking this year at stabilizing the exchange, because as you know if we don’t do something it’s going to blow completely up,” Middleton said in an interview.
A potential funding source under consideration to stabilize the individual market this year is about $340 million that health insurance companies don’t have to pay in federal taxes this year due to the federal tax overhaul, Middleton said.
“It’s taking money that insurance companies have been paying,” said Middleton, who chairs the Senate Finance Committee that is considering the bill.
Middleton’s emergency bill, which would take effect immediately on the governor’s signature, also includes provisions for the state to seek federal waivers for a long-term solution. It would require Maryland’s health care exchange to apply for a waiver in July, and, if approved, carry out the waiver. Four states, Alaska, Hawaii, Minnesota and Oregon, have approved waivers. Three of them are using the waivers to repurpose federal tax credits for reinsurance programs.
The federal Affordable Care Act included a federal transitional reinsurance program for calendar year 2014 through 2016. It was designed to stabilize the market due to an anticipated influx of higher-cost people. While the federal reinsurance program ended in 2016, the U.S. Department of Health and Human Services changed the federal risk adjustment program to include a reinsurance component this year.
Middleton’s measure also would institute an individual health care mandate at the state level that would be effective next year — in response to Washington gutting it at the federal level in the tax overhaul. Massachusetts has had a state individual mandate since 2006, prior to the passage of the federal Affordable Care Act.
Maryland House Speaker Michael Busch, Senate President Thomas V. Mike Miller and Gov. Larry Hogan met Tuesday morning to discuss proposals for stabilizing the state’s health insurance markets.
“The meetings have been very productive and they will continue going forward as we work to address this very important issue for Marylanders,” said Doug Mayer, a spokesman for the governor.
A total of 153,571 people enrolled in private health coverage during the 2018 open enrollment for Maryland’s state-based health insurance marketplace.
A separate measure in Maryland that was scheduled for a hearing Wednesday also would create an individual health care mandate at the state level. It would offer people without insurance a choice: pay a tax penalty or use the money as a down payment on insurance.
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