February 23, 2012

Legislation proposed to implement health care exchanges

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By Megan Poinski
Megan@MarylandReporter.com

Dr. Joshua Sharfstein

Dr. Joshua Sharfstein

Health Secretary Joshua Sharfstein told the Senate Finance Committee Wednesday that he was initially nervous about dealing with something so complicated and controversial as setting up the new federally mandated health care exchange to allow small businesses and individuals to purchase insurance at low rates.

But when he started working with stakeholders – literally scores of people from throughout the insurance, health care and business communities – Sharfstein said his initial fears evaporated. What he found, he said, was a “tremendous amount of consensus.”

“There was a broad recognition of the potential that implementing this law well has for the people of Maryland,” Sharfstein said.

Broad support for bill

Sharfstein and Lt. Gov. Anthony Brown testified on the proposal from Gov. Martin O’Malley’s administration twice this week: Wednesday before the Senate Finance Committee, and Thursday before the House Health and Government Operations Committee. The hearings lasted hours and dozens of people testified on the bill, but almost everyone who spoke supported the bill.

The lone opponent in the Senate, Raymond Sullivan of Healthcare-Now, said he supports the idea of a health care exchange, but would prefer that people wouldn’t have to pay any premiums at all.

“Health care is a human right,” Sullivan said.

The bill being proposed authorizes the health benefit exchange – created by legislation last year – to contract with health insurance providers to create a marketplace for small businesses and individuals to purchase medical and dental plans.

“This is kind of the mini-marketplace where individuals, particularly those who are eligible for federal subsidies, some of whom never had health insurance before, or small businesses that have never had health insurance before, are able to go to this mini-market and look at competitively priced, high quality health insurance that is right for their families and their business,” Brown said.

Exchange could enroll up to 360,000 people

Brown estimated that the exchange will enroll 180,000 Marylanders by 2014, and 360,000 by 2015. He estimated that through the exchange, the number of Marylanders without insurance will go from 13% now to 5.5% in 2015. He said that low-income families would be able to save hundreds in their premium costs through subsidies provided by the exchange.

The bill was drafted taking Marylanders’ concerns and issues into consideration. The federal Patient Protection and Affordable Care Act requires states to develop similar health care exchanges. Brown said if this bill does not become law, the exchange that will be put in place will be the federal cookie-cutter model, not something unique to Maryland.

The bill would establish two separate health care exchange markets: the individual exchange, and the small business health options program – abbreviated as SHOP – exchange.

Most insurance carriers who operate outside of the exchange would be required to also offer insurance in the exchange. Insurance carriers who make more than $20 million in premiums in the small group market, and $10 million in premiums in the individual market would all be required to participate in the exchange.

A person called a navigator would help individuals and businesses find insurance plans and get through the process of application, enrollment and tax eligibility, and answer questions. The navigator would work in and be paid by the exchange, and could not also be paid by insurance providers.

Stakeholders will be meeting on the bill later this month, and health department staff said that amendments will be drafted to the bill, and submitted to the General Assembly early in March.