ANNAPOLIS, Md. (AP) — Maryland officials on Wednesday announced federal approval of a waiver to create the nation’s largest health reinsurance program, a step designed to protect insurers from skyrocketing claims and hold down rates in the struggling individual market of the state’s health care exchange.
The federal Centers for Medicare and Medicaid Services approved the waiver, Republican Gov. Larry Hogan and leading Democrats of the General Assembly announced at a news conference.READ MORE: Gov. Hogan Honors Those Who Lost Their Lives To COVID-19; Marks March 5 As Day Of Remembrance
Lawmakers who sponsored legislation in the last session said the program was needed to rescue the state’s individual health exchange market, which faced collapse over sharply rising rates. State officials feared increases of up to 50 percent without action in the individual market, which affects about 250,000 people.
“By October, we expect to be able to publish new insurance rates without the crushing increases that have become common over the past decade,” Hogan said.
Maryland will use about $365 million that health insurance companies no longer have to pay the federal government due to last year’s changes to the federal tax code. Maryland also will receive federal matching money. Maryland’s program will be valued at about $462 million in its first year, the governor’s office said.
The money will create a pool to provide funding for the biggest claims in the individual market. The program will become active this year and run through 2020, with the potential to be extended through 2023.READ MORE: Adult Entertainment Resumes In Baltimore Friday Afternoon After City Agrees To Lift COVID Restriction
“This program will buy us time to strengthen the market for health coverage, which has already come a long way in the past few years,” said Michele Eberle, the executive director of the Maryland Health Benefit Exchange. “Despite challenges, Maryland continues to make gains with populations that have lacked health insurance, including young adults, African-Americans, Hispanics and rural Marylanders.”
The next step is for the Maryland Health Benefit Exchange Board to finalize the structure of the program. The Maryland Insurance Administration will then seek updated proposals for rates from the two carriers that serve the state’s individual market: CareFirst BlueCross Blue Shield and Kaiser Permanente. Rate filings for next year are expected to be reduced by an estimated 30 percent from what they would have been without the waiver, the governor’s office said, and the program is estimated to grow enrollment by nearly 6 percent in 2019.
Maryland is the seventh state to receive approval for a state-based reinsurance program. The others are Alaska, Maine, Minnesota, New Jersey, Oregon and Wisconsin.Baltimore County Public Schools To Allow Inner County Sporting Events Beginning Next Friday
(© Copyright 2018 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)