By Daniel Menefee
For Maryland Reporter
The Maryland Senate on Friday adopted the Maryland Health Insurance Coverage Protection Act to monitor congressional plans to repeal and replace the Affordable Care Act that could cost the state billions to maintain current coverage.
The intent of the bill, SB571, offered by Sen. Thomas “Mac” Middleton and 31 other Democratic co-sponsors, is to study ways to prevent 400,000 Marylanders from losing health insurance and plan for a potential loss of $4 billion in federal Medicaid and Medicare dollars that flow to the state each year.
Sen. Jim Brochin, D-Baltimore County, was the only Democrat not to sign on as a co-sponsor.
A plan released by U.S. House Speaker Paul Ryan March 6 cuts $880 billion from the Medicaid program and $673 billion in premium subsidies to those who purchased insurance through the exchanges, according to Congressional Budget Office report released last week, page 6.
Under Ryan’s plan, the American Health Care Act, the CBO estimated that 24 million Americans would become uninsured by 2026 from the loss of Medicaid funding and the eventual loss of federal subsidies available to those with incomes between 133% and 400% of the federal poverty rate.
Middleton’s bill is expected to pass in a final vote this week. A cross-filed bill in the House is co-sponsored by all 91 Democrats and six Republicans but there’s been no action on the bill since its hearing on March 10.
The Act would set up an 11-member commission, including the Maryland attorney general, to complete a study on the potential impact to Marylanders and devise plans to mitigate the loss of Medicaid and Medicare funding.
The commission would be authorized to convene workgroups over the next three years and report back to governor and legislature.
Big federal subsidies
The federal government currently subsidize 95% for Marylanders who became insured under the Medicaid expansion when the state fully implemented the ACA. This brings about $2.8 billion in annual Medicaid support in 2017 and the state’s share is just $70 million.
The state also stands to lose its Medicare waiver, which is the only program of its kind in the country that allows hospitals to charge Medicaid and Medicare the same commercial rates charged to insurance companies, normally much higher than what Medicaid and Medicare reimburses in other states. The waiver also allows the state, not the federal government, to set the rates.
The waiver brings around $2.3 billion in additional funding to Maryland hospitals annually.
ACA decreased number of uninsured
When Maryland fully implemented the Affordable Care Act in 2013 the unprecedented expansion of Medicaid added 291,000 Marylanders to the Medicaid rolls by 2016, according to analysis by the Maryland Department of Legislative Services.
This was accomplished by raising the income eligibility to 138% of the federal poverty rate for all individuals under 65 who were enrolled beginning January 1, 2014. Previously Medicaid eligibility had been restricted to low-income parents with children, the elderly and the disabled, and the reimbursement rate was a 50-50 cost sharing arrangement with the federal government.
Under the expansion, the federal government kicked in 100% of the cost of new Medicaid enrollees from 2014 through 2016. But that was scheduled to get a gradual trim to 90% by 2020 and remain in effect indefinitely. The state would pick up the other 10%.
Maryland’s share to cover the Medicaid expansion in 2017 is around $140 million and the federal government will kick in around $2.8 billion, 95% of the total costs.
The state costs were expected to grow to $350 million by 2021, with the federal match rising to $3.5 billion.
But the Ryan plan would reduce federal government participation for new Medicaid enrollees beginning 2020 and set the cost sharing at 50-50, the traditional cost sharing split that existed before the expansion.
If a 50-50 split were in effect the state’s Medicaid obligation this year would be $1.3 billion.
Middleton said in floor debate Friday that “there’s a reasonable certainty the feds will…hand back 50% of the costs.”
The Ryan plan would also affect the 143,000 Marylanders who qualified for subsidized premiums through the Maryland Health Benefit Exchange. The Ryan plan ends those subsidies, saving $673 billion in federal spending through 2026, according to the CBO report.
Maryland’s exchange has received $137 million in state funding and $425 million in federal funds since 2011. The exchange has 67 employees with annual salaries approaching $8 million.