The outcome of last week's presidential election has vindicated the wisdom of Maryland's early decision to begin setting up a state health exchange where consumers can shop for affordable health insurance coverage. President Barack Obama's victory virtually assures that the Patient Protection and Affordable Care Act he signed in 2010 will go into effect as planned in 2014. Having survived constitutional challenges in the Supreme Court earlier this year and an election-year campaign pledge by GOP challenger Mitt Romney to dismantle the law if elected, states across the country must now start setting up similar exchanges or face having the federal government do it for them.
Only Maryland and a 14 other states plus the District of Columbia have taken concrete steps toward establishing the kind of state insurance exchanges mandated by the health reform law, and among them, Maryland is generally considered to be among the farthest along in its efforts. Until now, many of the remaining states delayed getting started because Republican officials there hoped the courts would throw out the law or that Mr. Romney would be elected and fulfill his promise to scrap it. Now the states have until Friday to say whether they plan to set up their own exchanges or have the federal government do it for them.
The Department of Health and Human Services on Friday extended the deadline for states to send in their blueprints for exchanges, but 11 states have already decided not to participate. In other states, governors said they would wait until after the election to decide how to proceed, but realistically, it's too late to start from scratch, even with the extended deadline.
As envisioned by the law, the state exchanges are to function as insurance clearinghouses where consumers could shop for the best values in coverage and rates. By opting from the start to work on setting up an exchange, Maryland officials guaranteed that they, and not the federal government, would get to make key decisions about how the new marketplace will fit in with the state's current system of regulating insurance and delivering care.
There is some irony here. Maryland, a state dominated by Democrats who generally favor a more expansive role for the federal government, insisted on and will get authority to run their own exchange. But in Republican-dominated dominated states like Texas and Kansas, for example, the decision not to set up an exchange hands over significant power to federal bureaucrats.
The exchanges won't themselves have the power to directly set insurance rates — those will be determined by the private companies that sell coverage — but they will establish minimum benefit levels and set the parameters for other aspects of the plans they endorse, which should help assure consumers that they're getting the best value for their money. Individuals and companies can still buy insurance plans that aren't listed on the exchanges but they will likely have to pay more for them for the same levels of coverage. Many of those who buy insurance through the exchanges will be eligible for federal subsidies.
Gov. Martin O'Malley and state lawmakers embraced the health exchange concept early, and as a result Maryland has already made substantial progress toward getting its exchange, called the Maryland Health Connection, up and running. The state created an independent government agency to set overall policy and make any changes needed to bring the state's current health care system into compliance with the federal health reform law. Its nine-member board of directors includes six members appointed by the governor with the remaining seats filled by the state health secretary, the state insurance commissioner and the executive director of the Maryland Health Care Commission.
In addition, Maryland recently received a $123 million federal grant to fund the establishment of its exchange. Coupled with earlier federal start-up and early innovator awards the state has received a total of about $157 million in federal grants for its exchange, which has been put into place virtually without the use of state funds. Moreover, Maryland may still be eligible for several million dollars more in federal grants available to states whose models can be replicated elsewhere.
Maryland's plan potentially could extend affordable health insurance coverage to as many as half of the 720,000 state residents who currently lack it. That alone would save the state some $850 million over the coming decade in lower Medicaid and uncompensated hospital emergency room care costs.
Massachusetts' health care reform law, which also included the establishment of an insurance exchange and was signed by then-Governor Romney in 2006, helped tamp down the escalation of health care costs there by extending affordable coverage to nearly everyone in the state. There is every reason to think Maryland can duplicate that success.Copyright © 2015, The Baltimore Sun