Maryland’s request to extend its state innovation waiver, under Section 1332 of the Affordable Care Act, was recently approved by the Centers for Medicare and Medicaid Services (CMS) for a further period of five years. State innovation waivers may waive certain federal requirements in order to improve the health insurance market.
THE State reinsurance program (SRP) was enacted by the 2018 Legislature under Bill 1795 and was an emergency measure. The objective of the SRP is to mitigate the impact of high cost listings on carriers participating in the individual market. The SRP reduced rates and created brief relief for some residents who suffered steep rate increases on their health insurance premiums.
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The SRP reimburses insurers for a portion of their claim costs, and lower costs allow carriers to charge lower premiums. The Maryland Health Benefit Exchange (MHBE) is responsible for submitting SRP parameters. During the public comment period, an anonymous resident of Maryland written in support to approve the extension of the derogation on 3 June.
“Maryland is one of the nation’s leaders in healthcare innovation, and for many people living in the state, access to affordable healthcare is a matter of life or of death,” the supporter wrote. “The waiver allows the state to improve coverage and affordability, and to ensure (high quality) care. I fully support the state’s request to extend approval, and strongly suggest that it obtain approval. »
The MHBE says the aim of the waiver was to reduce overall premiums by 30%, but has exceeded that target each year. In 2019, overall premiums were reduced by 33.8%; in 2020, they were reduced by 37%; in 2021, they fell by 32.8%; and in 2022, they have decreased by 31%.
A overview of waiver estimated impacts include reducing average premiums by 34% and increasing enrollment coverage by 6.4%. In addition, the amount of federal savings over five years is estimated at $2.2 billion.
CMS administrator Chiquita Brooks-LaSure said the waiver extension will run from January 1, 2024 to December 31, 2028, in the CMS approval letter sent on June 28.
“The departments remain committed to working with state partners to advance health care coverage policies. Through Section 1332 waivers, the departments aim to help states develop health insurance markets that expand coverage, reduce costs, and ensure that affordable health coverage is available to their residents.
— Chiquita Brooks-LaSure, Administrator, CMS
THE renewal of the reinsurance program will reduce individual market premiums and premium tax credits, which will be transferred to the state to be used in implementing the waiver plan, Brooks-LaSure added.
The Department of Health and Social Services and the Department of the Treasury determined that the extension of the waiver should provide coverage that is, at a minimum, as comprehensive as it was without the waiver. It will also provide coverage and cost-sharing protections against massive expenses that are as affordable as they would be without the waiver. The waiver will provide coverage to more people without increasing the federal deficit.
According to the departments, consumers in the personal market should continue to benefit from lower premiums, which should attract new customers and retain existing consumers. They estimate that average statewide premiums for 2024 will be approximately 34% lower in the individual market than they would have been without the waiver, and listings in the individual market will be about 6.4% for that year.
In a press release, MHBE Executive Director Michele Eberle said the expanded reinsurance program is fantastic news for the state and will allow residents to have better access to health care coverage. affordable.
“The Maryland Reinsurance Program has been successful in keeping rates affordable for anyone purchasing individual insurance in Maryland, on-exchange or off-exchange. He has played a particularly important role in stabilizing premiums for Marylanders who are not eligible for subsidies.
— Kathleen Birrane, Maryland Insurance Commissioner
According to MHBE, Maryland offered the third-lowest average monthly health insurance premiums in the nation through state market coverage at $472 this year, after Utah at $431 and New Hampshire at $469. $. So far in 2023, the state has seen its fifth straight year of enrollment growth, totaling 182,166.
Communities of color, which have historically lacked health insurance, have also seen increased enrollment in Maryland. The MHBE said registrations of black people have increased by almost 3% this year. Enrollment for Hispanics increased 9% and 13% for Hispanics ages 18-34.
The departments said the federal government plans to spend less on premium tax credits (PTCs) under the waiver than it would without the waiver. Maryland is expected to receive “pass-through” funding to support the state’s waiver plan, based on the portion of the TPC that would have been provided to Marylanders absent the waiver.
“This amount will be reduced, if necessary, to ensure deficit neutrality,” the statement said. “With the extension of the Enhanced PTC, the State estimates the waiver will generate net federal savings of $453.7 million in 2024 and $2.2 billion in total over the five-year waiver period. This indirect funding will cover a substantial portion of the state’s costs for the reinsurance program.