Maryland has a long history of enacting statewide health reforms and 2019 was no exception with the passage of several significant reforms, including the Maryland Easy Enrollment Health Insurance Program (MEEHP), which passed with bipartisan support and was signed by Gov. Larry Hogan in June. Maryland is also implementing a new value-based plan design for health insurance marketplace plans and is continuing the state’s reinsurance program. Collectively, these reforms are helping advance Maryland’s objectives to improve affordability and attain near universal coverage.
NASHP spoke with Michele Eberle, executive director of Maryland’s health insurance marketplace – Maryland Health Connection – to learn about the implementation of these programs, and how Maryland’s reforms are providing greater stability to its insurance market.
Maryland implemented a reinsurance program beginning in plan year 2019, why?
After the federal reinsurance program ended [after plan year 2016], premiums in the state’s individual market spiked. Maryland has only two insurance carriers in our individual market, and we worried there was a risk of either losing those carriers or pricing people out of coverage. We wanted to be aggressive in addressing the issue of affordability. We also recognized a unique opportunity in that Congress planned to delay implementation of the Health Insurance Tax [HIT – an annual fee assessed by the federal government on health insurers]. We argued that we would assess our insurers, in lieu of this fee to the federal government, and use the money to finance a reinsurance program. Our 2.75 percent assessment gave us nearly $365 million, combined with federal funding drawn from a 1332 waiver, we secured nearly $1 billion over a five-year period for a reinsurance program. [For more information read State Reinsurance Premiums Lower Premiums and Stabilize Markets.]
Our goal was to reduce premiums by 30 percent from what they would have been without the reinsurance program. And, for the first time in 20 years, we saw our premiums decrease in 2019 on average by 13 percent. The program has been so successful, the legislature this year agreed to maintain a 1 percent assessment on our insurers to finance the program even once the federal HIT is implemented [ plan year 2020].
What led Maryland to propose and enact the MEEHP?
This concept originally started as a traditional individual mandate [a requirement that all individuals purchase health insurance]. But there was mixed support for a mandate and operational challenges to implementing one in our state.
The policy is a testament to the work and commitment of our many stakeholders and legislature. Our goal is to achieve health care access for all, without people feeling that they are forced into a program. We also want to offer consumers affordable and value-based coverage. We developed MEEHP because it addresses these issues, which is a win-win for all.
How will the MEEHP work?
For the 2020 plan year, the marketplace will use data collected from state tax filings to complete a preliminary assessment of whether a person is eligible for Medicaid, CHIP, or a federal tax credit. The person will then be provided a list of resources to help them enroll in the coverage program for which they are eligible. In 2021, we plan to roll out an automatic enrollment feature (upon request) if the person qualifies for Medicaid or CHIP. If the person does not qualify for Medicaid or CHIP, they can enroll in marketplace coverage during a 35-day special enrollment period based on the date the marketplace received their information from the Office of the Comptroller )
At the marketplace, we are working very closely with the [state] Comptroller to implement this program, including transferring information between their department and our system. We now know the Comptroller’s office timelines and what they will need to have this ready for the upcoming tax season. Very early on, the marketplace and the Comptroller’s office began collaborating and that partnership is essential to ensuring we could meet fast-approaching deadlines.
Our current focus has primarily been on modifying our IT systems to operationalize the program. But we are also prioritizing working with stakeholders and other partners on how to message about the new program.
We are especially excited that this initiative gives us more robust information about Maryland’s uninsured population. It will help us target our outreach and inform our efforts to boost enrollment. We are trying to think of ways to make it easy for consumers to follow up and enroll in coverage.
How will Maryland’s new, value-based plans serve consumers?
As noted previously, the reinsurance program has led to a tremendous reduction in individual market premiums. However, while premiums have been going down, deductibles have been rising, leading to higher out-of-pocket health care spending by our consumers. We were concerned that consumers wouldn’t see the value of their coverage — if premiums and deductibles are too high, they will question whether it is worth purchasing coverage.
Under our value-based plan program, each carrier must offer at least one plan with a capped deductible for two metal levels in which it offers coverage ($1,000 for gold plans, $2,500 for silver). In addition, a bronze plan must cover at least three physician visits (primary care or specialists) prior to the deductible and the gold value plan must offer generic drugs before deductible.
We believe these requirements will help ensure that consumers can get value from their plans. Looking ahead, we will continue to refine our value-plan requirements. For example, we are looking at whether generic prescriptions should be covered pre-deductible, or with a separate deductible. We are also looking over how to improve coverage for diabetic populations.
What has been the key strategy to advancing these reforms so quickly in Maryland?
Maryland’s administration and legislature have a history of committing themselves to the improved health of Marylanders. For instance, even before passage of the Affordable Care Act, Maryland had enacted its own small group market reforms, including benefit requirements and a community rating standard. We are fortunate to have a lot of engagement from stakeholders and the administration on advancing further reforms.
Part of what drives innovation here is our global budget initiative, an all-payer model regulating hospital costs. The global budget underlies all our health systems and payers, so that anything that affects one part of our health care system reverberates throughout. The state does whatever it can to maintain this program, including actions to maintain our insurance markets, reduce our uninsured rate, and keep our uncompensated care costs down.
Which stakeholders have been especially helpful throughout your work?
Both of our health insurance carriers are always at the table and I appreciate the relationship we have built with them since establishment of the marketplace seven years ago. The marketplace and the carriers work together, proactively, to address concerns. We have a plan management stakeholder committee that includes all carriers and consumer advocates. They are one of the first groups we engage on any new initiative for the marketplace. We have discussions on how new policies will impact our insurers. I meet regularly with the CEOs of our health plans and discuss how we can work in partnership to affect overall health in our state. There were some challenges early on in our relationship, but the insurers have seen some benefits in working with us. For example, Kaiser Permanente’s market share has grown from 2 percent to 46 percent in our health insurance marketplace. Both of our insurers have seen significant growth overall.
We also have two groups that are focused specifically on consumer issues. What is important for us is to be as transparent and inclusive as possible. We know these issues effect populations statewide.
What advice would you offer to other states looking to enact similar reforms?
Establishing and building relationships with your stakeholders — consumer advocates, legislature, carrier community — is essential. It is important to approach reforms with a holistic view of what is going on with your markets and health systems. The insurance marketplace is one part of this wheel, but to really make changes on affordability and cost, we need everyone heading in the same direction. For example, I recognize the importance of our reinsurance program, but also acknowledge that other reforms will be necessary if we are going to have a long-term impact on health care costs.