Health reform's changes stir worries as they take shape in Md.

State readies for launch of new insurance marketplace Oct. 1, with federal law taking effect in 2014

March 31, 2013|By Scott Dance, The Baltimore Sun

State lawmakers put finishing touches last week on plans to apply federal health care reforms in Maryland come Jan. 1. But who becomes newly insured — and at what cost —still worries stakeholders as the state speeds toward becoming one of the first to adopt a revamped system.

Under legislation passed by the House of Delegates and Senate, more low-income Marylanders would qualify for government-funded health care through Medicaid, and an existing tax on health insurers would sustain a new insurance marketplace once federal support wanes.

State health and insurance officials face a long to-do list during the next nine months as they implement reforms needed before the Affordable Care Act takes effect. They will decide what health plans will be offered in the state, and at what prices; recruit uninsured residents for new coverage; and launch a complex computer system to parse who is eligible for new government assistance.

Given all the work yet to be done, there are still questions about how health care and insurance will look to consumers and how much it will cost. How many people take advantage of the new coverage— and how healthy they are — will help determine whether patients' bills will continue, slow or reverse their rise.

And a dramatic proposed change in the way state hospitals can charge for services could add to the upheaval. On Tuesday, state hospital regulators submitted an application to change the state's Medicare waiver, which allows them to set hospital rates. In other states, hospitals are reimbursed based on rates negotiated with insurers or dictated by Medicare. The proposal would create incentives for Maryland hospitals to reduce the cost of care, ending compensation based on inpatient admissions and thus removing an incentive to fill more hospital beds.

State leaders who embraced adoption of the Obama administration's 2010 reform law acknowledge the uncertainty. But Gov. Martin O'Malley's top health care deputy said the administration crafted the complex new system over three years hand-in-hand with key players in the state's health care industry.

"I think it's natural that when you have the type of reform we have seen in the Affordable Care Act, and whether it's in health care or any other policy area, there's always going to be some trepidation. It's pretty much around the uncertainty or the unknown of what's to come," Lt. Gov. Anthony G. Brown said. "I believe in Maryland, given the nature of our process, we have done a good deal to tamp down the anxiety."

That process began when O'Malley's issued an executive order the day President Barack Obama signed the health act into law, launching a program to oversee health reform changes in the state. Since then, the O'Malley administration and state lawmakers have passed laws including one in April 2012 creating the Maryland Health Benefit Exchange.

Now the state aims to open the exchange Oct. 1, so those in search of affordable insurance can enroll in plans by the start of 2014. To meet that timeline, "every day counts," said Rebecca Pearce, the exchange's executive director.

Insurers must submit proposed plans and rates Monday to the Maryland Insurance Administration, giving an idea of what choices the exchange might offer consumers. The state's regulatory review of those plans is expected to take months; state insurance officials have broad authority to ask for changes before approving plans for sale.

The exchange hired public relations firm Weber Shandwick to develop an advertising campaign likely to hit television and radio waves, websites and public transit by September. It is hiring six regional contractors to coordinate grass-roots education on coming health reform changes, as well as a vendor to train those responsible for outreach and another vendor to launch a statewide telephone helpline for people with questions about the exchange.

Health officials aim to reach Maryland's estimated 750,000 uninsured residents and explain their new coverage options so they can enroll by the end of the year. Their goal is to enroll 147,000 in insurance in the first year.

Another 108,000 will gain coverage through expanded Medicaid eligibility O'Malley is expected to sign into law this spring.

But some question whether the state's expectations will become reality. The federal health reform law includes a mandate that all be covered by health insurance or pay a penalty, a divisive aspect of the legislation that the Supreme Court upheld last year. That leaves open the possibility that some could choose to remain uninsured, and outside of the exchange's risk pool. Reform rests on the notion that spreading the risk over more individuals will reduce costs for all.

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