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Md. leaders ask Congress to help stabilize insurance market

Senate President Thomas V. Mike Miller, left, shakes hands Wednesday with Gov. Larry Hogan on the occasion of his fourth State of the State address. (The Daily Record / Maximilian Franz)

Senate President Thomas V. Mike Miller, left, shakes hands with Gov. Larry Hogan on the occasion of his fourth State of the State address. (The Daily Record / Maximilian Franz)

Maryland’s leaders are asking the state’s congressional delegation to help find solutions to stabilize the individual health insurance market.

In a letter, Gov. Larry Hogan, Senate President Thomas V. Mike Miller Jr. and House Speaker Michael E. Busch asked Congress to find long-term solutions, including a reinsurance program, to supplement short-term efforts the legislature is currently pursuing.

“As the leaders of Maryland state government, we write to urge you and your colleagues to take action to create more predictability in the national health insurance markets,” they wrote.

CareFirst BlueCross BlueShield and Kaiser Permanente, the two insurers in the market, have indicated that as things stand, they could request premium increases between 30 and 50 percent for next year, the letter said.

Those increases would come after rates increased by nearly 50 percent on some plans last year, when President Donald Trump’s administration cut cost-sharing reduction subsidies to insurance companies. Last year’s tax legislation also effectively eliminated the Affordable Care Act’s individual mandate, paid by people who choose not to purchase health insurance.

Since the Affordable Care Act went into effect in 2014, the number of people uninsured in Maryland has dropped to about 6 percent of the state’s population, mostly because of the law’s expansion of Medicaid.

Continued rate hikes could encourage more people who do not qualify for tax subsidies to leave the market, making it unsustainable.

At the state level, the legislature is considering several stopgap options that lawmakers hope will reduce the rates insurers will ask for in requests due in May.

A leading proposal would create a reinsurance program funded entirely through state funds and special taxes for the 2019 market year. Insurers believe for every $100 million in a reinsurance pool, they can reduce their rate requests by about 8 percent.

Another proposal would create a state individual mandate.

All of the proposals will also be considered by the House of Delegates’ Affordable Care Act Workgroup, chaired by Del. Joseline Peña-Melnyk. That bipartisan group will likely craft a final version of a stopgap solution.

The group spent Monday’s meeting hearing about different reinsurance programs set up in other states. This week the group will also receive an actuarial analysis of what reinsurance could look like in Maryland.

A federally funded reinsurance program could represent a longer-term solution, buttressed by federal dollars instead of the patchwork financing that would be used for the state-funded program next year.

“We are currently working to respond to the problem before the end of this legislative session, but, given the severity of the problem, the solutions that we can implement at a State level may only be short-term in nature,” the leaders wrote. “Combined with State resources, (federal reinsurance) could help us stabilize the individual market so that we can preserve the gains we have made since the passage of the Affordable Care Act.”

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