As MD’s Health Insurance Exchange Moves on to Next Phase, Enrollment Continues

Many Maryland residents can continue to sign up for health insurance under the Affordable Care Act even though the first open enrollment period for the state’s health insurance exchange – Maryland Health Connection --ended this week. In the meantime,  the state is  turning toward doing a better job of managing things for the next  open enrollment period, which begins on November 15.

While there are various deadline for getting health insurance under the Affordable Care Act, there are also several exceptions. Medicaid enrollment is available year-round. As a result of Maryland’s decision to expand Medicaid under the new law, thousands of residents are newly eligible. Though many have already enrolled, those who  have not—or did not previously qualify—don’t  need to  wait for the next open enrollment period to do so. They can enroll at any time.

Second, many others are still eligible to enroll in private coverage through Maryland’s exchange. This includes those who were not able to sign up during the open enrollment period due to technical problems, provided that they called the hotline the state set up to report their problem. This likely includes thousands of residents.

In addition, the law makes available ‘‘Special Enrollment Periods’’ that allow anyone who  has experienced a change in circumstances during the year to sign up outside the normal enrollment period. This can include getting married, having a child, losing a job or employer-sponsored insurance, divorce, or the death of a spouse. Further, if your income  income changes and you become  eligible for subsidies to help you pay for  private insurance, you can  enroll or re-enroll in subsidized coverage at any time. More information on Special Enrollment Periods is available at the Maryland Health Connection.

Of course, the state now faces  the task of overhauling its exchange before open enrollment begins anew in November. This involves both correcting the problems that plagued the Maryland Health Connection since its launch last year, as well as efforts to build on the successes of the exchange’s first year.

On Tuesday, Maryland’s Health Exchange Board voted to replace its flawed information systems  with the technology used to run Connecticut’s largely successful state exchange, implemented and maintained by the consulting company Deloitte. Secretary of Health and Mental Hygiene Joshua Sharfstein and Isabela FitzGerald, Maryland’s Secretary of Information Technology, explained that doing so was the least expensive option and also met Maryland’s timeframe and needs. Connecticut’s exchange is described as “a simpler, streamlined system.” Rebuilding the exchange would take too long and would be too expensive ($66 million). Moving to the federal exchange would pose similar problems and  raise additional issues about the exchange’s ability to communicate with the state Medicaid program. While the software code for Connecticut’s exchange is in the public domain and thus freely available, Secretary FitzGerald expects that it will still cost the state $40-50 million to implement. It is still  unclear how much of this cost will be covered by the federal government, as much of the $125 million for the original exchange was.

However, just as Maryland is working to correct the missteps from this first year of running its health insurance exchange, lawmakers should also recognize and build upon its successes. First, we already know that Maryland surpassed its initial enrollment projections. Almost 300,000 men, women and children  are known to have enrolled - 232,000 in Medicaid and 63,000 in private plans – and this does not reflect the surge of sign-ups during the final days of open enrollment, nor those who have more time to enroll due to technical difficulties.

Many of these people are newly ensured, and all will enjoy more financial security as a result of being covered. This is important progress. This large increase in the number of Marylanders with health coverage followed “a decade or more of people losing health coverage and a steady erosion in the financial protection of insurance, [which] put middle-income families at risk” nationwide, according to a recent report by the Commonwealth Fund.

In the coming weeks and months, we will delve deeper into the issues surrounding Maryland’s implementation of the Affordable Care Act, considering both what worked and what did not, discuss policy options for improvement and reform, and provide data and analysis on how health reform is impacting Maryland. Keep checking back here for more.

November Spending Affordability Briefing: Increasing Debt Service Costs, Savings from Affordable Care Act

At its November briefing of the Spending Affordability Committee, the Department of Legislative Services urged state lawmakers to maintain current levels of debt, citing increased debt service costs in the coming years. DLS also noted that Maryland will both save money and provide more residents with health coverage due to its implementation of the Affordable Care Act (ACA).

Legislature Urged to Keep Debt at Current Levels

At the briefing, DLS analysts warned of increasing costs of debt service, the money required to pay the interest and principle on bonds that Maryland has issued. DLS forecasts that these costs will crowd out Maryland’s ability to spend money on other projects in the coming years.

The analysis and recommendation are in part a response to Governor O’Malley’s request, backed by the Capital Debt Affordability Commission, to increase debt authorizations by $75 million annually between 2015 and 2019 for the purpose of funding Maryland’s Watershed Improvement Plan.

According to the DLS, doing so will increase debt servicing costs by $43 million during this period. However, this is the result of not only increased borrowing but also a decrease in revenue from state property taxes. Property taxes, which are used to fund debt servicing, have been down as a result of the housing collapse and Great Recession, which caused housing prices in Maryland to decline for 55 months in a row. Prices have started to increase since February 2012, but because property tax revenues lag real estate market trends, DLS expects that property tax revenues will stabilize and start to increase slightly beginning in 2016.

In the meantime, debt service costs are expected to increase by 6.1 percent annually while property tax revenues are projected to increase by half a percent annually. As a result, DLS projects that beginning in 2014, an increasing amount of General Fund Revenues will be needed to pay for debt service each year.

In addition, there are more requests for funding from the capital budget than there are dollars: more than $1 billion in requests compared to just $320.4 million in unallocated funding.

DLS therefore argued that maintaining debt at current levels rather than increasing borrowing is “the remaining lever to provide relief from this ongoing fiscal squeeze” available to lawmakers.

Affordable Care Act Saving Maryland Millions

The other key theme of the November meeting of the Spending Affordability Committee was that DLS projects that Maryland will see “significant general fund savings” as a result of its implementation of the Affordable Care Act. What is most noteworthy is not just that the state will save money, but that it will do so while also providing health coverage to more residents. DLS finds that Medicaid enrollment will increase at a greater rate both because Medicaid eligibility has been expanded and because increased publicity from the Maryland Health Benefit Exchange marketing campaign is leading residents that were previously eligible but not enrolled to sign up.

General Fund Savings Attributed to the Affordable Care Act in the Medicaid Forecast

Fiscal 2014-2019

($ in Millions)

Source: Department of Legislative Services Spending Affordability Briefing, November 14, 2013.

(Click to Enlarge)

These savings are largely the result of increased federal funding to implement the ACA. Maryland’s Primary Adult Care Program will end on January 1, 2014 as the single adults currently in this program will be eligible for the expanded Medicaid program which is mostly funded by the federal government. Combined with other sources of increased federal funding for health care programs, these savings are more than enough to offset costs that Maryland will bear to implement the ACA.

Check back tomorrow for the rest of our briefing summary.

EPI Report Shows MD Offers Better Climate for Workers than Many States, But Challenges Remain

Today, the Economic Policy Institute released a report describing actions in state legislatures across the country that have been detrimental to the ability of residents with moderate and low incomes to earn a decent living. EPI describes how this policy agenda has been financed by corporate interests and serves to drag down wages, lower labor standards, and erode employee protections for union and nonunion workers alike.

Fortunately, many of the most harmful developments outlined in the report - including laws restricting the minimum wage, removing regulations on child labor, and imposing new limits on benefits for the unemployed – have not taken place here. Rather, Maryland has enacted policies that improve the economic security of residents. These efforts include protecting Marylanders from catastrophic health expenses by implementing the Affordable Care Act and expanding Medicaid as well as providing tax credits and job training for workers through the state’s EITC and EARN Program.

However, Maryland needs to continue to enact policies that provide economic opportunity and overcome challenges to doing so. For example, EPI’s report notes that corporate lobbies have successfully defeated efforts to establish paid sick leave in cities and states across the country, including Maryland. In the coming legislative session, state lawmakers have the opportunity to enact paid sick leave as well as join other states across the country in raising the minimum wage. In this regard, EPI’s report serves as a useful reminder that the policies that provide security and opportunity for Maryland’s workers must be protected from those that seek to undermine them and that citizens and policymakers must continue to push for measures that help raise the living standards of all Marylanders.   

Despite Setbacks, Affordable Care Act Helping MDers Obtain Health Coverage

Well over 85,000 Marylanders obtained health coverage through Maryland’s implementation of the Affordable Care Act (ACA) since the state began carrying out key components of the health reform law three weeks ago, according to the Maryland Department of Health and Mental Hygiene. For many of these enrollees this marks the first time they have been able to afford coverage in a long time, or ever.

Maryland has been a leader in implementing the ACA, a law with many complementary elements that are designed to both provide health coverage to millions of Americans that currently go without care, as well as improve the value of existing plans. To do so, the ACA establishes health insurance exchanges, or marketplaces where citizens can view and compare health insurance options, find out if they are eligible to receive federal subsidies to purchase a plan or qualify for Medicaid, and enroll. Anyone with income up to 400 percent of the federal poverty level ($45,960 for an individual; $94,200 for a family of four) is eligible for federal subsidies to purchase insurance through the exchanges.

The nationwide rollout of the Affordable Care Act (otherwise known as Obamacare) has been fraught with missteps. Glitches associated with HealthCare.gov, the federal insurance marketplace operating in 34 states, have been well documented. Other reports have emerged of potential unintended consequences, including a recent story in the Sun about Maryland community colleges cutting the hours of adjunct faculty in order to avoid having to comply with the requirement that large employers provide health insurance to employees that work 30+ hours per week.

Maryland set up its own exchange, the Maryland Health Connection. This too has had a rocky start, with technical difficulties of its own that have prevented many residents from being able to sign up or view the various options available to them. Nonetheless, these problems are less severe than those of the federal exchange and are being repaired more rapidly. Indeed, the Maryland Health Connection reports that the site has been increasingly able to handle the high demand for coverage, demonstrated by the more than 300,000 unique visitors to the exchange website and 33,000 calls to its call centers since opening on October 1. Of these visitors, more than 40,000 people have created identity-verified accounts for their households, and more than 27,000 have learned whether or not they are eligible for subsidies. Further, as of October 23, more than 3,100 Maryland households have successfully enrolled in an insurance plan through the Maryland Health Connection.

While these results are inadequate to meet the needs of Maryland’s 800,000 uninsured residents, who comprise 14 percent of the state’s population, they are promising nonetheless. The Maryland Health Connection’s data shows that enrollment has been increasing steadily since its debut on October 1:

Cumulative Household Enrollment through the Maryland Health Connection

Source: Maryland Health Connection weekly reports

(click to enlarge)

Further, interest among younger adults, whose enrollment is considered key to keeping premiums low on plans sold through the exchange, is relatively high. According to the Maryland Health Connection’s most recent report, the 25-29 age group has created the most accounts, followed by the 30-34 age group.

Another important element in the ACA’s effort to expand health coverage is the expansion of Medicaid eligibility to anyone whose income is at or below 133 percent of the federal poverty level ($15,282 for an individual; $31,322 for a family of four). The Supreme Court made expansion optional for states, and Maryland is one 26 states that have chosen to move forward with this expansion. The Maryland Health Connection reports that 82,473 currently uninsured Marylanders are signed up to be automatically enrolled in Medicaid coverage beginning in 2014. And while a recent article in the Wall Street Journal raises concerns that Maryland’s “aggressive” approach to enrolling residents in Medicaid coverage will “siphon off” younger, healthier residents from the exchanges, the Maryland Health Connection’s data thus far suggests this is not the case. Further, because the federal government is picking up 92 percent of the costs of expanding Medicaid over the next ten years, Medicaid expansion is an efficient way to provide health coverage to low income residents that also saves money in Maryland’s state budget.

The problems that have emerged since the launch of the state and federal health insurance exchanges are important to identify and address as quickly as possible. Nonetheless, Maryland’s leadership in implementing the ACA has to date resulted in well over 85,000 newly covered residents. And while the numbers of Marylanders that have signed up for coverage through the Maryland Health Connection remain relatively low in light of official expectations that 150,000 people will in the first year, the state’s data suggests that these numbers are steadily increasing as repairs are made to the exchange’s website. Further, the experience of Massachusetts, whose state insurance exchange served as the model for the ACA, suggests that many will sign up towards the end of the open enrollment period, which closes on March 31, 2014. Success will be measured by who is signed up at the end of the enrollment period, not the first few weeks. During this time, it is important for Maryland to continue its proactive push to implement and improve the Affordable Care Act to ensure that all of its residents have access to the care they need. 

1.2 million MDers to gain healthcare protection

According to a report out today from FamiliesUSA, nearly 1.2 million non-elderly Marylanders with pre-existing conditions will gain needed protection from health insurance discrimination under the Patient Protection and Affordable Care Act (ACA).  That's nearly one out of every four Marylanders under the age of 65 (24.2 percent).

Thanks to the ACA, beginning in 2014 no Marylander (or resident of any other state) can be denied coverage, charged a higher premium, or sold a policy that excludes coverage of important health services simply because of a pre-existing condition. Using historical data about the number of Maryland residents diagnosed with pre-existing conditions, FamiliesUSA was able to estimate the number of individuals at risk of being discriminated against by the health insurance industry. The 1.2 million Marylanders are distributed across the state, including:

• 184,800 in Montgomery County
• 170,900 in Prince George's County
• 167,000 in Baltimore County
• 136,300 in Baltimore City

Furthermore:

• In Allegany and Garrett counties, the share of non-elderly residents with a diagnosed pre-existing condition is 28.8 percent (highest in the state).
• 46.1 percent of adults between 55-64 years of age have been diagnosed with a pre-existing condition that, until the ACA, would have put them at risk of health insurance discrimination.
• Income does not predict likelihood of pre-existing conditions--24.3 percent of Marylanders in households making more than 4x the poverty rate have been so diagnosed.
• The numbers may in fact be much higher, as FamiliesUSA based their estimate on the number of Marylanders currently diagnosed with a pre-existing condition. Many others, particularly those currently without health insurance, may be undiagnosed.

We here at MBTPI are glad that Maryland is at the forefront of the effort to implement the ACA, and will continue to promote policies that meet the needs of all Marylanders, especially those most in need.

Affordable Care Act Constitutional

As you've no doubt seen, the U.S. Supreme Court upheld the constitutionality of the Patient Protection and Affordable Care Act (ACA), including the insurance mandate "tax". This is good news for the millions of Americans without health insurance (or who previously lacked insurance, like the 52,000 Marylanders age 26 and under who now have health insurance through their parents because of the ACA), and the millions more who have insurance but pay the social costs of supporting those in need of care who can't afford it.

Maryland has consistently been in front of other states in terms of implementing the ACA, and this is likely to continue. Barring the Republicans gaining a supermajority in Congress and repealing the act entirely, Maryland is well positioned to take full advantage of the changes now ahead. 

Nonprofit Quarterly has a good roundup of what to expect now that the court has ruled:

• "Expect more opposition advocacy." - Whether this ruling will be a boon for either party in November remains to be seem, but it's definitely an issue that isn't going to go away.
• "Expect resistance to health exchanges in some states" - Not in Maryland, however.  We continue to develop our health exchange as fast as possible.
• "Expect more funding wars."  - This is the outcome that has the most potential for danger to Maryland. If Congress cuts funding, Maryland will have to figure out how to continue making progress with less.
• "Expect attempts to better assist small businesses and nonprofits."
• "Expect increased scrutiny of nonprofit hospitals."

The Week Ahead

Last week we blogged about Maryland bucking the trend of public disinvestment, and the inability of the legislature to compromise on expanded gambling (so far). 

Monday, June 25th

• State Commission on Criminal Sentencing Policy holds a meeting to review and evaluate Maryland's sentencing guidelines and policies. 5:30pm in Training Rooms 1 & 2 of the Judiciary Education and Conference Center, 2009D Commerce Park Drive, Annapolis. 
• Joint Committee on Exchange Financing of the Maryland Health Care Reform Coordinating Council will hold its first meeting. The exchanges are a key part of the Affordable Care Act (ACA), so no doubt the impending Supreme Court decision (see Thursday, below), will be on everyone's minds. 1-3pm in the Joint Hearing Room, Department of Legislative Services, Annapolis.

Tuesday, June 26th

• The Task Force to Study the Court Decision Regarding Pit Bulls will hold a work session. 10am in room 2 East, Senate Building, Annapolis. 

Wednesday, June 27th

• The Workgroup on Access to Habilitative Services Benefits will hold its first meeting. 9am in the Hearing Room on the 24th Floor of St. Paul Plaza, 200 St. Paul Place, Baltimore.

Thursday, June 28th

• Maryland's Medicaid Advisory Committee meets. 1-3pm at the offices of the Department of Health and Mental Hygiene, Lobby Level Conference Room L-3, 201 W. Preston Street, Baltimore.
• Maryland's Venture Fund Authority holds a board meeting. 10am to noon at the offices of the Department of Business and Economic Development in a conference room on the 17th floor of the World Trade Center, 401 E. Pratt Street, Baltimore. 
• Maryland Nonprofits is offering Program Design: From A to Z. For more information or to register for this training go to their events page.
• The U.S. Supreme Court will release its ruling on the constitutionality of the Affordable Care Act. If they rule against the ACA they may do so in whole or in part, and the consequences for Marylanders and others with inadequate access to health care may be significant. Look for a related post on this blog later on Thursday.

Saturday, June 30th

• The Fair Development Coalition is cosponsoring an event to celebrate the passage of HB 457, which mandates that .5% of federal transportation funding go toward job training programs.  U.S. Congressman Elijah Cummings will speak, and a number of other state and local political figures have been invited. Inquires about the event can be directed to Maureen Daly at 443-286-4731 or maureen.daly4@gmail.com, or David Casey at 443-857-0831 or bridgemaryland@aol.com. St. Bernardine Church Hall, 614 Mt. Holly St at Edmondson Ave. in West Baltimore.