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Maryland wins $123 million for health care reforms

Maryland is getting a $123 million infusion from the federal government to help start its health exchange, a state-sponsored insurance marketplace required under President Obama's health insurance overhaul that is expected to cost state taxpayers up to $50 million annually, according to the state's health care consultants.

Maryland Lt. Gov. Anthony Brown announced the federal award on Thursday with a new name and website for the exchange -- the Maryland Health Connection accessible at MarylandHealthConnection.gov -- which is expected to be fully functional by October 2013.

Once the website launches, Marylanders will be able to research and shop for health insurance online from a variety of participating providers, with insurance coverage beginning in January 2014. The state is expecting roughly 150,000 people to buy insurance through the exchange in the first year.

Maryland officials are still working out the details on how the website will function and whether to charge consumers a fee for access as a means of generating revenue for the exchange's operating costs. Those costs could add up to $50 million annually after 2015, according to early estimates by the state's consultants from the Boston-based Wakely Consulting Group.

The grant is the largest to date that Maryland has received for the planning stages of its exchange, bringing total federal funding for the online marketplace to more than $157 million. A substantial portion of the money will go to technology support for the website, officials said.

The federal government has been generous with Maryland because it is so far ahead of most other states in planning for its health exchange.

"Maryland has moved forward aggressively to build our exchange in order to expand access to affordable health care options, and today's grant is further recognition of our national leadership," said Brown, whom O'Malley tapped to lead the state's health care reforms. "With the help of these funds, the name Maryland Health Connection will become synonymous with a one-stop, transparent marketplace where individuals and small businesses can compare rates, benefits and quality among private insurance plans to find one that best suits their needs."

Overall, the federal government has doled out more than $1 billion to states that are setting up exchanges. The Patient Protection and Affordable Care Act requires that the federal government cover the costs of designing and implementing states' respective health exchanges, which must be fully functional by January 2014, with the states taking on operational costs in 2015.