Republican Gov. Larry Hogan and leading Maryland Democrats on Wednesday celebrated federal approval of a waiver they say will prevent the state’s Obamacare marketplace from collapse — and save health insurance coverage for about 250,000 state residents.
Senate President Thomas V. “Mike” Miller and House Speaker Michael Busch joined Hogan in the State House in Annapolis to announce that the federal Centers for Medicare and Medicaid Services approved Maryland’s State Innovation Waiver to create a reinsurance program to help stabilize Maryland’s health insurance market and prevent predicted massive rate hikes.
“About 250,000 Marylanders were going to be without health insurance unless we took action during this last legislative session,” Busch said, calling the legislation creating the reinsurance program the most important of the year.
Busch added that the move helps keep rates down for some of the 94 percent of Marylanders who have access to health insurance. The House Speaker said he planned to continue to work until the “remaining 6 percent of uninsured Marylanders have quality healthcare.”
Miller said the legislation is necessary because the administration of President Donald Trump is trying to tank the Affordable Care Act, the health care legislation supported by former President Barack Obama.
“This is an example of both parties working together,” Miller said of partnering on the bill with Hogan. “It’s about solving Maryland’s problems.”
Hogan blamed both the Democratic and Republican parties in Washington for failing to act to reform the nation’s health care system to keep rates down.
“We all came together to try to save the people of Maryland because of the failures of Washington,” the governor said. “There were 250,000 people at risk of potentially losing their health care coverage and there were more people than that who were subject to seeing their rates go up by 50 percent or more. We’ve had rate increase after rate increase after rate increase. It was just escalating out of control. There were people out there making decisions about, ‘Can I afford my health insurance premium or can I feed the kids?’”
The Maryland legislation directed the Maryland Health Benefit Exchange to submit a State Innovation Waiver under the Affordable Care Act to the U.S. Secretaries of Health and Human Services and the Treasury to establish a state reinsurance program. The legislation combined with the waiver will set up a reinsurance pool to provide funding for catastrophic claims for policyholders in the individual market, according to the state.
The waiver approvals means Maryland will have the largest reinsurance program in the nation, valued at $462 million, according to state officials.
The program will become active this year and run through 2020, with the potential to be extended through 2023. The state will support the reinsurance program by taxing funds previously assessed by the federal government on insurance carriers, which is expected to provide about $365 million.
The $365 million tax is expected to help curtail surging premiums for Marylanders and prevent the state’s Obamacare marketplace from a potential collapse.
Maryland’s U.S. Senators, both Democrats, hailed the deal.
“Team Maryland is committed to making sure that families have access to quality, affordable health care,” U.S. Senators Ben Cardin and Chris Van Hollen said in a statement. “This waiver, which the Congressional delegation strongly urged the Administration to grant, will allow the state’s proposal to establish a reinsurance program and lower premium costs for people across Maryland to move forward. At a time when the Affordable Care Act is constantly under attack, we are fighting for the best health care options for our state.”
Democratic candidate for governor Ben Jealous said he applauded only the “Democratic leadership in the General Assembly for preventing further premium cost increases for more than 200,000 families.”
But Jealous said the reinsurance plan isn’t enough, and more needs to be done.
“Maryland's monthly benchmark healthcare premium has already increased by $267 since 2014. Our families and small businesses cannot afford to see the cost go up even more,” Jealous said in a statement. "While today's announcement creates a stopgap for many Marylanders, we still need a long-term plan to bring down healthcare costs for everyone. That's why I will bring people together to create a Medicare-for-All system that guarantees high-quality and affordable healthcare to every Marylander, and brings down prescription-drug prices, especially for our seniors."
The Maryland Health Benefit Exchange Board will next finalize the reinsurance program structure. Then, the Maryland Insurance Administration will request updated proposals for rates from the two carriers who serve the individual market in Maryland: CareFirst BlueCross BlueShield 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, and the program is estimated to grow enrollment on Maryland’s individual market by nearly six percent for 2019, according to state officials.