Tucked into the massive pandemic relief bill just passed by Congress is a provision that will cut the cost of health insurance for Marylanders by tens of millions of dollars.
The legislation, which provides $1.9 trillion in funding for stimulus payments, health care and other measures, will aid a majority of the 192,000 state residents who buy plans on Maryland’s health exchange or directly through an insurance company.
Lawmakers and observers say this is the biggest expansion of the Affordable Care Act, known as Obamacare, since it was enacted in 2010.
“Most people will get something,” said Michele Eberle, executive director of the Maryland Health Benefit Exchange, which oversees the online health insurance marketplace.
“For the last four years we’ve been trying to dodge things coming at us and protect what we have,” she said. “Now it’s a bit of whiplash because we have this new American Rescue Plan Act and it has wonderful items in it to help people get insured or higher subsidies.”
The U.S. Centers for Medicare and Medicaid Services estimates savings on premiums, which begin April 1 and last for two years, will average of $50 per person per month or $85 per policy per month.
The benefit may be a bit higher in Maryland, according to an exchange analysis, perhaps closer to $64 a month, on top of the average $90 consumers get now.
Most people will not have to do anything to get the extra benefit. Anyone who enrolled through the online portal and indicated they wanted the highest subsidy will be reviewed automatically and notified of their new premium costs.
Others in the lowest tier plans, called bronze or catastrophic plans, will have to indicate they may want to tick up to a higher level to get a bigger benefit. Most people chose those plans for the low premiums, but they also typically carry higher deductibles.
Other consumers who bought plans directly from an insurance company — CareFirst Blue Cross Blue Shield, Kaiser Permanente or UnitedHealthcare — were not getting any federal subsidies. But under the relief legislation, they will not have to pay more than 8.5% of their income in premiums.
To get that benefit, however, those consumers will have to sign up through the state exchange. Eberle said all of the insurers indicated they would allow any plan holder who contacts them to switch to the exchange immediately to tap the benefit.
In all, there are about 30,000 people who buy individual plans directly from insurers and about 162,000 people who buy them on the exchange, and the majority are likely to see benefits.
Maryland already has been enrolling extra consumers in exchange coverage through a special enrollment period created under Gov. Larry Hogan’s emergency order for the coronavirus pandemic. Anyone who loses a job or insurance already was entitled a short period to sign up for coverage outside of the normal enrollment period in the fall, but the order expanded the time people could buy a plan.
The federal relief bill also provided states extra incentive to expand their Medicaid programs, which is the federal-state health insurance program for low-income residents, and allows woman to remain on Medicaid for a year after giving birth. Maryland already expanded its program and those who qualify can sign up any time of year. There are about 1.2 million people enrolled in Maryland.
Another insurance provision in the federal relief bill covers premiums for people who use the federal program known as COBRA to continue their employer coverage after they leave their job.
In Maryland, about 6% of the population remains uninsured, which translates into about 236,000 people who are eligible. Exchange officials are launching a new marketing campaign to reach some of them, including Black and Latino people and young adults, who are more likely to go without coverage.
In recent years, state lawmakers also have moved to shore up the exchange by replacing a federal program that had helped insurance companies pay for their most expensive beneficiaries. And the legislature also passed a program that allows residents to check a box on their tax forms to get information about health insurance.
Consumer advocates cheered the new funding as a way to help people who have been economically or personally affected by the pandemic.
“The American Rescue Plan includes major provisions to make health insurance more affordable to many Americans,” said Vincent DeMarco, president of the Maryland Citizens’ Health Initiative. “Having health insurance will provide peace of mind and ensure that more people across Maryland and the nation will be able to get the health care they need.”