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Maryland braces for Supreme Court decision on health care reform law

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Brian England, owner of British American Auto Care in Columbia, said his health care costs dropped last year because of the medical loss ratio provision in the Affordable Care Act.

Miriam Brand just graduated from the University of Maryland and does not have a job, but she does have health insurance.

The 22-year-old diabetic is among the 2.5 million Americans who were allowed to stay on their parents' policies because of the federal health care reform law.

"I was definitely very scared about getting insurance after college, never mind staying with my same doctors," she said. "I feel lucky my parents have good insurance and I can stay on it."

Brand joins the many young adults, children, seniors and others already benefiting from the Affordable Care Act who worry that the Supreme Court will strike down all or part of it.

The court's term is nearing an end, and several decisions are expected, including one that could overturn the law. A challenge was brought by several states that believe its foundation violates the Constitution. Several lower courts were split, and during six hours of oral arguments earlier this year, some justices appeared to favor those opposed to the law.

At its core, the health care reform law mandates everyone carry insurance whether through an employer, a government-sponsored plan such as Medicaid or one of the statewide health care exchanges the law would create. The law essentially spreads costs to everyone and takes several steps to keep rising costs in check.

Specifically, the court is expected to decide whether all Americans can be compelled to carry insurance, a so-called individual mandate, and if the rest of the law hinges on it.

Supporters say everyone eventually needs medical care so it's fair to mandate everyone buy coverage. But critics maintain that that is what's unconstitutional.

In Maryland, where the law's implementation has been embraced, officials, advocates and providers already say they plan to push for reforms even without the law, though leaders including Lt. Gov. Anthony G. Brown acknowledge that it would become much harder and more "piecemeal" to cover the state's 750,000 uninsured residents and tougher to maintain every benefit for those with coverage.

"Maryland has always aggressively pursued reform," said Brown, who heads up the state's health care reform effort. "It would be my hope that we'd continue to be bold and aggressive."

Under the law, the federal government subsidizes the expansion of state Medicaid programs and offers tax breaks so small businesses and individuals can buy coverage on newly created exchanges that open in 2014. States have already received $1 billion to set up those marketplaces.

Initial projections shows about 180,000 people in Maryland would gain insurance through the exchange and 84,000 through Medicaid's expansion in the first year, according to the Governor's Office of Health Reform.

The exchange and Medicaid expansion could move ahead without the subsidies but other funding would be needed, Brown said. More than $400 million in federal subsidies was expected just for those on the exchange, according to the Hilltop Institute at the University of Maryland, Baltimore County, a nonpartisan health research organization.

It's "probable" Maryland's exchange would operate without the law, Brown said, but there would be a lot of review and debate. Requiring the public to buy insurance in Maryland might be a tougher sell but "would be part of the conversation," he said.

Several states plan to go ahead with their exchanges even if the law is struck, said Joanne Corte Grossi, regional director of the U.S. Department of Health and Human Services, during a recent health care forum in Baltimore. Maryland leads the nation in preparing its marketplace, she said.

And while public support for the health care law is mixed, federal lawmakers also would seek a new law including some of its more popular provisions, Grossi said. "The horse is out of the barn."

A handful of insurance companies, including Aetna and UnitedHealthcare, said they will continue covering some of those provisions, including free preventive care, allowing children to stay on their parents' insurance until age 26 and eliminating lifetime policy caps.

"The protections we are voluntarily extending are good for people's health, promote broader access to quality care and contribute to helping control rising health care costs," Stephen J. Hemsley, president and CEO of UnitedHealth Group, said in a statement.

About 54 million Americans and 1.2 million Marylanders received at least one free preventive service through their private insurance, federal data shows.

And 2.5 million young adults like Brand have chosen to stay on their parents' policies, including almost 52,000 in Maryland, according to federal data. (Maryland already required such coverage until age 25.)

There are other initiatives aiming to benefit patients and cut costs in the health care system, and officials say they also are likely to be continued if the law is struck down. About $350 million has been allocated to fight Medicare fraud, for example. And the federal Centers for Medicare & Medicaid Services is working to link hospital reimbursement to various quality measures.

Hospitals also have been looking for ways to expand access to care, improve quality and reduce costs, said Carmela Coyle, president and CEO of the Maryland Hospital Association.

"Providing coverage for everyone in the absence of federal subsidies will be more challenging, but it doesn't mean it can't be done," she said.

Still, advocates say some provisions may not survive without the law, including efforts to cut out-of-pocket drug costs for seniors, closing the so-called donut hole. Federal data show that 416,000 Medicare users saved an average of $724 on prescription drugs so far this year because of the law.

Almost 900 people in Maryland have been added to a federally backed program that insures those with pre-existing conditions. The plan allows the state, which has its own high-risk pool, to cover more people ahead of 2014 when the law says insurers can no longer deny adults coverage. Insurers already must cover children with pre-existing conditions under the law, and those children may lose their benefits if the entire law is overturned.

Tax breaks that help small businesses afford coverage could also be in jeopardy. Federal data show 360,000 small businesses have gotten the aid.

Brian England's Columbia auto repair shop didn't qualify for subsidies but he said the law is benefiting workers at his British American Auto Care anyway. His health care costs dropped last year because of the medical loss ratio provision, which requires insurers to spend at least 80 percent of premiums on direct care of patients. And he's been encouraging workers to take advantage of preventive care and other benefits.

"It would be a gloomy thing now if the whole law went away, a big step backward," he said.

The law isn't benefiting everyone. Marsha and Russell Geist had to drop insurance for their Dayton business, Metropolitan Landscape Management Inc., because of high costs last year.

"It was a very tough decision, but we couldn't continue offering insurance with 20-30 percent cost increases every year," Marsha Geist said.

Her workers got a little more money in their paychecks, she said, and some are covered now under their parents' plans. They hope to restore coverage in the fall after reviewing premiums and tax subsidies.

"If the law isn't repealed, we hope to use it to again offer the coverage we'd been offering since 1990," she said.

Health care advocates said they fear more people will lose, or never gain, benefits if the law is struck down.

If that happens, they plan to work with policy-makers and providers to preserve some of its provisions because "so many young people, small businesses and seniors are already benefiting, and they deserve this," said Vincent DeMarco, president of the Maryland Health Care for All Coalition.

Paying for benefits without federal subsidies will be an obstacle, acknowledged Kathleen Westcoat, president and CEO of HealthCare Access Maryland, which helps people connect with coverage. Still she believes the state will find a way to retain some of the law's improvements.

So do some conservatives who don't support many aspects of the Affordable Care Act.

Ultimately, people should have private insurance they can take from job to job, said Ed Haislmaier, a senior research fellow at the conservative Heritage Foundation. That probably will happen through statewide exchanges, no matter the court's decision, he said.

Eastern Shore Republican Rep. Andy Harris said if the law is struck down, states would likely make more health care policy decisions, which he views as a positive.

"There is no question that the cost of both health care and health insurance is increasing much more rapidly than before and something has to be done," he said. "The question is what form it will take and whether it is done at the federal or state level."