Even as the federal health care reform law appears to be headed to the Supreme Court after another legal setback Friday, Maryland received $27.2 million to move forward on implementing the law's insurance exchanges where consumers can shop for affordable health plans.
The state said it will use the money to hire staff and set up electronic infrastructure for the exchanges — despite the decision by the 11th U.S. Circuit Court of Appeals in Atlanta to strike down as unconstitutional a provision that requires Americans to buy health insurance or face a fine.
"We understand there is a challenge, but we're not going to squander the time that we have," said Lt. Gov. Anthony Brown. "We are moving forward with planning."
Because Friday's legal decision conflicts with another appeals court ruling that upheld the law, the Supreme Court is expected to take up the issue during the term that begins in October. A ruling could be possible just months before the November 2012 presidential election.
The White House voiced confidence the law would be upheld. "We strongly disagree with [Friday's] decision, and we are confident it will not stand," Stephanie Cutter, an aide to President Barack Obama, said in a statement.
Maryland was one of 13 states and Washington, D.C., chosen to share in $185 million awarded Friday by the U.S. Department of Health and Human Resources to set up the insurance exchanges.
Critics have questioned whether states should continue putting reform in place when its legality continues to be questioned.
Officials from at least one state said they would not take the money being handed out by the federal government. Gov. Sam Brownback of Kansas has said he will return the $31.5 million the state received because he wasn't sure the federal government would be able to make future payments.
In Maryland, Anthony J. O'Donnell, House of Delegates minority leader, said the state was moving too quickly, although he didn't go so far as to say Maryland should return the grant money.
"I think we need to slow down a little bit and not rush headlong in while this thing is in legal jeopardy," O'Donnell said.
Rep. Andy Harris said he believes the federal government and state are wasting money by implementing something that may not withstand legal challenges. But the Republican lawmaker also said the state has an obligation to follow the law that is in place.
"I don't think Obamacare is the solution," Harris said. "I think in the end it will be overturned, and a lot of money will be spent to no good end. But Obamacare is the law of the land, and implementation is going forward."
Democratic members of Maryland's congressional delegation applauded the grant.
"We're one step closer to our goal of ensuring that health care in America is a right and not a privilege," Sen. Benjamin L. Cardin said in a statement.
Maryland has been aggressively moving toward reform through legislation and other means and has already begun planning for exchanges. Brown is co-chairman of the Health Care Reform Coordinating Council, which was formed to oversee implementation of health care changes in the state.
Analysts expect the changes to save Maryland $850 million and cut in half the number of uninsured by 2020.
The state will use the money it received to hire an executive director and other staff for the exchange and to begin setting up the electronic infrastructure for what will ultimately be the exchange. Exchanges are meant to lower the cost of insurance by providing more choice and purchasing power to consumers.
"This will allow us to put the building blocks of the exchange in place," said state Health Secretary Joshua Sharfstein, who is also chairman of the Health Benefit Exchange Board, which was set up to create the state's exchange.
Brown said the federal money means state funds will not be needed for the exchange. Maryland has received a total of $34.4 million in federal funds to implement the changes.
Sharfstein said the state should continue because nobody knows what will happen in the courts.
"We're just going to have to let the process play out," Sharfstein said. "Some of these decisions have gone our way. We just need to have patience. In the meantime, we're moving ahead with the law and rolling up our sleeves to get it implemented."
The individual mandate was challenged by 26 states that argued that Congress had exceeded its authority by imposing such a requirement. But the Obama administration had argued it was legal under the commerce clause of the U.S. Constitution.
A federal judge in Florida sided with the states and struck down the entire law, leading the administration to appeal.
A divided three-judge panel of the 11th Circuit found that it did not pass muster under that clause or under the power of Congress to tax. The administration has said the penalty for not buying healthcare coverage is akin to a tax.
"This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them repurchase that insurance product every month for their entire lives," the majority said in its 207-page opinion.
Reuters contributed to this article.