Maryland – State Approves Bills Intended to Stabilize Insurance Market
April 2018 ~
The Governor of Maryland has passed legislation which seeks to stabilize Maryland’s health care insurance market and prevent rates from increasing.
According to the Governor’s office, health insurance rates on Maryland’s individual market were set to increase by 50% or more over the next year.
The legislation, HB 1795/SB 1267, lays out the structure for a reinsurance program to be administered by the Maryland Health Benefit Exchange (MHBE) and will require health insurers operating within the state to pay a 2.75% tax on the premiums (approximately $380 million) over a one year period to help stabilize rates and limit the rising of cost premiums for the next several years.
The proceeds will be used to create a reinsurance program that insurers can then tap into to cover “catastrophic claims” in the Affordable Care Act (ACA) market.
A fiscal policy note submitted with the bill indicates that state officials will request a 1332 state innovation waiver to allow federal funds to support reinsurance efforts. The state must wait for the MBHE’s Board of Trustees to formally vote to apply for a 1332 waiver to use federal pass-through funding to support reinsurance efforts.
Maryland marks the 5th state to develop an individual reinsurance program and seek federal support for funding it, but is the only state that to implement a tax on insurers as a solution for the gap in the federal insurer tax.
Source(s): General Assembly of Maryland – HB1795; General Assembly of Maryland – SB1267; Office of Governor Larry Hogan; The Washington Post0; The Baltimore Sun; HealthPayer Intelligence;