Maryland lawmakers and health care advocates have proposed a new state program that seeks to replace the unenforced federal mandate requiring every citizen purchase health insurance.
Sen. Brian J. Feldman of Montgomery County and Del. Joseline A. Peña-Melnyk of Prince George’s County joined health care advocates and businesspeople in Annapolis Tuesday to announce a new legislative effort aimed at establishing a “health insurance down payment plan.” The plan calls for Marylanders to either purchase health insurance on their own, or else pay a state tax penalty for being uninsured. It would essentially serve as a replacement of the mandate levied by the Affordable Care Act (ACA), which the Trump administration has said it would not enforce.
A bill outlining the plan will be considered by the General Assembly in 2019.
The move follows up on the successful passage of a bipartisan bill last legislative session that called for the establishment of a reinsurance program for the two companies that offer individual health care coverage on Maryland’s ACA exchange. Per that bill, the Maryland Health Benefit Exchange, which oversees the state’s ACA market, applied for a federal 1332 “innovation waiver” that would allow for the creation of a reinsurance program to help stabilize the volatile individual health plan market.
Four years of double-digit percentage premium increases among individual ACA plans made health insurance seem unaffordable to many Maryland consumers. Reinsurance is intended to help health insurance companies mitigate the risk and potential losses from covering the market’s sickest and most costly consumers. The nearly $500 million effort aims to help insurers save thousands in compensated care costs, so they can pass those savings onto consumers.
Thanks to expected reinsurance savings, CareFirst BlueCross BlueShield and Kaiser Permanente are offering 2019 individual health plans at a 13 percent average price decrease compared to last year. The shift is expected to encourage Maryland residents to remain in the market instead of opting to go without insurance altogether.
It was touted as a big win for state insurance officials and lawmakers, but additional measures will likely be needed to ensure longterm stability of the market, said Vincent DeMarco, president of the advocacy group Maryland Citizens’ Health Initiative. That’s where the health care downpayment plan comes in.
Maryland is following the lead of other states, like Vermont, which have sought to establish their own versions of the ACA’s individual mandate. The lack of mandate enforcement is among several steps the Trump administration has taken to dismantle the Obama-era health care law, though it has not been able to repeal the ACA.
DeMarco explained why the program is considered a “down payment” instead of only a mandate. When Marylanders are asked on their annual tax forms whether they have health insurance, he said, they will get the option to either pay the $695 per adult annual penalty for being uninsured, or put that money toward purchasing a plan.
“I think it’s unlikely that people would say ‘Sure, keep my money and don’t give me any health care,'” DeMarco said. “People want health insurance and we hope this will help continue to make coverage more affordable for Marylanders.”
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People who do not have health insurance typically receive any needed medical care in an emergency room, which is extremely expensive. Those unpaid costs, called uncompensated care, are a burden on the entire health care market and can drive up other people’s insurance premiums.
DeMarco said data from from the U.S. Agency for Healthcare Research and Quality and the Maryland Health Services Cost Review Commission shows since the passage of the ACA, more than 400,000 Marylanders have gotten insured, and uncompensated care costs have fallen by about $400 million over five years.
Supporters hope the health insurance down payment plan can serve to further drive down health care costs for Maryland residents.
Date: December 19, 2018