Brown, Sharfstein say exchange should keep moving forward in face of Supreme Court case

Originally Published on Gazette.Net

MPPI in the News Sarah Breitenbach, Staff Writer Nov 18, 2011

As the Supreme Court prepares to consider the constitutionality of President Barack Obama’s health care overhaul, officials in Maryland say they’ll keep pushing forward with plans to implement portions of the law.

Work on a new health insurance marketplace, one of the first steps in adopting the reform, will continue to move forward, Lt. Gov. Anthony G. Brown (D) said. A committee overseeing the development of a health benefit exchange is finalizing its recommendations to the General Assembly next month.

“We don’t have time to delay, so we certainly don’t want to hesitate and wait to see what the court does,” said Brown, who championed legislation to create the exchange earlier this year.

The exchange, which the federal law mandates that states establish by 2014, would provide a virtual marketplace where individuals and small businesses could compare and purchase health insurance plans.

It also would allow people to enroll in Medicaid, the Children’s Health Insurance Program and provide an electronic calculator for users to determine the cost of their health care coverage in light of any tax credits or subsidies they receive.

The work already done by the committee won’t be lost even if the federal law is overturned, Brown said.

“If the federal funds aren’t available and we decide that we want to move forward on an exchange, then we’ll have the decision to make and the governor [will work] with the General Assembly [to determine] what state resources we want to dedicate to setting up an exchange,” he said.

Even though the High Court is expected to hear arguments challenging the law’s constitutionality, specifically a provision that requires everyone carry health insurance, Brown said the exchange process must proceed to take advantage of federal dollars.

Since passing legislation to guide the implementation of the health care exchange during the 2011 legislative session, Maryland has received $34.4 million in funding for the program from the federal government.

Starting in 2014, the board will be able to impose user fees and other regulatory charges to operate the exchange, which is expected to be self-sustaining by 2015. It has cost the state little money to date, said Brown, although neither he nor Department of Health and Mental Hygiene Secretary Dr. Joshua M. Sharfstein could say how much the state has spent.

Even though the Supreme Court isn’t expected to consider the health benefit exchange portion of the reform act, striking down any element of the federal law could create roadblocks for the Maryland plan, said Marc Kilmer, a senior fellow at the conservative-leaning Maryland Public Policy Institute.

“The law really is so interlocking that even if one part of it is struck down, that is going to change the calculation of how the states and federal government move forward with implementing the law,” he said.

Kilmer cautions that Maryland, one of a handful of states already moving forward on the exchange process, is at risk for making mistakes and unnecessary spending by getting out of the gate early.

He points to an exchange established in 2007 in Massachusetts that has been criticized for not deregulating the insurance market aggressively enough as an example of why the process might not be beneficial for Maryland.

“All these reforms can be done at the state level, but these things aren’t going to produce good outcomes,” Kilmer said.

Sharfstein, who sits on the exchange oversight committee, said the group is prepared to move forward with new recommendations to the legislature in 2012.

If the Supreme Court overturns the law, “it would be very disappointing,” Sharfstein said, adding that the state then would have to figure out its next step.

“I think people consider that scenario extremely unlikely,” he said.