Maryland lawmakers are moving ahead of the trend in establishing a federally required marketplace for residents to buy health insurance, but lawmakers are still not sure how much it will cost. The General Assembly voted to set up a health benefits exchange — or insurance marketplace — by Jan. 1 and designated a nine-member board to run the operation. The exchange will market and sell health care plans to the uninsured and small businesses that don’t already provide employees with insurance.
The federal government will bear the brunt of the initial costs, but Maryland’s fiscal analysts say the state also will make a significant contribution.
Gov. Martin O’Malley included $20 million in his fiscal 2012 budget for the Maryland exchange. The allocation will pay mainly for information technology, including a website that will help determine patients’ insurance eligibility.
Maryland also has secured $997 million in federal funding for the initial planning stages and expects to reap more in return for taking a lead.
“Early innovator states will play a critical role in developing a consumer-friendly marketplace where insurers must compete to deliver the best deal,” said Health and Human Services Secretary Kathleen Sebelius in announcing Maryland’s grant. Sebelius said the funding will provide a model to “ensure consumers in every state will be able to easily navigate their way through health insurance options.”
California is the only other state that has established an exchange in response to the Affordable Care Act. Massachusetts and Utah established exchanges independent of the federal law.
Maryland’s fiscal analysts say the most similar existing model is Massachusetts’ — which the federal government also used as an example — where lawmakers spent $25 million setting up the insurance network.
At least 20 other states have pending legislation to create an exchange, but many — including neighboring Virginia — are punting on action and instead requesting a study on the logistics of implementation.
Virginia lawmakers will debate whether to commission a study this week when they return to Richmond for a special session on redistricting.
Meanwhile, some states are having trouble even acting on a study. Georgia Gov. Nathan Deal recently rescinded his request for study on implementation after a Tea Party rally stormed Atlanta in protest.
Maryland lawmakers dealt with considerable pushback as well, particularly from doctors, insurance brokers and business representatives.
In response, the General Assembly stripped the exchange of its power — barring the board from selling or marketing insurance — until the legislation reconvenes and authorizes action next year.
