Even as the Supreme Court considers the fate of the federal health care reform act, Maryland lawmakers should press ahead on legislation aimed at setting up a state health care exchange. Such an exchange would make it easier for consumers to find affordable insurance plans and extend coverage to thousands more of the 720,000 Marylanders who currently lack health insurance.
Whether or not the court ultimately rules all or parts of the federal law unconstitutional — such as the mandate requiring everyone to purchase health insurance — having a state health care exchange up and running will make quality health care more widely available and make insurance rates and coverage plans more transparent for individual consumers and small businesses.
Both the Maryland House of Delegates and the Senate have passed bills that would allow the state to set up a health-care exchange along the lines envisioned by the federal law. Now lawmakers need only reconcile the differences between the House and Senate versions before Gov.Martin O'Malley, whose administration has spearheaded the measure, can sign it into law.
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If the Supreme Court lets the federal health care reform law stand and it goes into effect without Maryland having established a structure for its health exchange, the state risks having the federal government step in and do the job for it.
That's why lawmakers must make every effort to get a bill on the governor's desk this year. Maryland already has received a $1 million federal grant to begin planning for the exchange, and it is eligible for another $5 million in federal start-up funds when the bill becomes law. Moreover, it could also qualify for several million additional federal dollars in the form of early-innovator grants that will be awarded to five states that show their model can be replicated elsewhere.
Even if the reform law falls, the exchanges are still worth having. Although the provision of the federal law that critics object to most strongly — the mandate requiring everyone to buy health insurance or pay a penalty — would play a central role in achieving lower insurance costs, the state health exchanges themselves are a separate issue that don't depend on whether the mandate is constitutional. The exchanges can't force anyone to buy coverage, nor will they have the authority to directly set insurance rates. Their purpose is to set minimum benefit packages for insurance plans offered in the state and select the best values for consumers at a variety of coverage levels.
If the federal law is overturned, the state health exchange would still be able to offer those services to consumers, although insurance prices overall would probably be higher because hospitals and insurers would the have to spread the costs of uncompensated care for the uninsured among a smaller pool of paying customers. Even if that happened, however, state officials estimate that if an exchange enabled just half the state's currently uninsured residents to get the coverage they need, it would save the state some $850 million over the coming decade.
Of course, Maryland could always pass its own version of the federal mandate by requiring all state residents to buy health insurance. That's what the Massachusetts did, and its plan, which also included a state health exchange to help consumers find affordable coverage, served as the model for the federal law. More to the point, it drastically cut Massachusetts' spiraling health care costs by making insurance affordable for nearly everyone in the state. If the federal health care law is struck down entirely or in part, Maryland should consider whether a state-level mandate makes sense. But no matter what the state's eventual answer to that question is, creating the exchanges now will improve access to affordable, quality health care for Maryland residents and small businesses alike.