Washington Business Journal: Maryland Lt. Gov Puts Forth Public/Private Entity Exchange Proposal

Maryland official pushes for health exchange to be public-private entity

Washington Business Journal – by Emily Mullin

Date: Friday, March 11, 2011, 9:54am EST

Related:

Health Care, Insurance

Nicholas Griner | Staff

Lt. Gov. Anthony Brown proposes the state’s health insurance exchange be a public-private entity.

Maryland’s health insurance exchange, which needs be set up by 2012, could be a hybrid public-private entity under new amendments that Lt. Gov. Anthony Brown has proposed.

Brown has this month introduced several amendments to Gov. Martin O’Malley’s health benefits exchange bill that, if passed, would set up the new health insurance marketplace born out of the federal health reform law as a public corporation with attributes of both a government agency and nonprofit.

Maryland’s top health leaders, the state’s medical industry and the business community have debated for months on whether to establish an insurance exchange as a private nonprofit organization or as a government-run entity. And Brown’s proposed amendments are an attempt to quell concerns raised by the business community — namely health insurance brokers — that a government-run exchange could siphon off some of private industry’s business.

Under the Patient Protection and Affordable Care Act signed into law last March, states must create a health insurance exchange — a new online marketplace that will help consumers find health coverage — by 2012. The exchange must be fully operational by 2014.

O’Malley has said that getting legislation passed to set up the exchange is one of his top priorities in the 2011 General Assembly Session. House Bill 166 and Senate Bill 182, introduced in January by O’Malley and several lawmakers, would establish Maryland’s health benefit exchange as an independent unit of state government.

Meanwhile, Maryland’s hospitals, doctors and insurance brokers have favored a private-sector exchange.

“There should be limitations as to what the exchange can do and clearly, it should not have in its power to focus on people who already have coverage,” said Steven Salamon, co-chair of the Health Insurance Buyers and Brokers Coalition of Maryland.

Since O’Malley’s bill was introduced, Brown and lawmakers have been working with the state’s businesses, brokers and health care industry to come to a compromise on what the exchange should ultimately look like. A new version of the bill was drafted March 4.

New proposed amendments would limit the exchange to only perform the basic functions of what is authorized in the Affordable Care Act. In other words, the amendments would set up a bare bones exchange, and any expansion of the functions of the exchange, like qualifying and rating insurance plans, would need to be legislated by the General Assembly.

“I have worked closely with stakeholders to make sure their concerns are addressed, and with our amendments I believe we have developed the framework for a more effective and efficient exchange,” Brown said in a statement.

Salamon, also the immediate past chairman of the Maryland Health Care Commission, said the bill is moving in the right direction and insurance brokers generally support Brown’s amendments. He said brokers want a benefits exchange that targets Maryland’s 750,000 uninsured individuals as its main customers instead of people that already have health insurance, which would take business away from brokers.

Gene Ransom, CEO of MedChi, said the state’s medical society is happy with the direction the bill is going. But the organization still has some concerns about how the exchange will be overseen. O’Malley’s bill would set up a nine-member Board of Trustees to run it.

Ransom said MedChi is worried about having too many government employees as board members and said the board should instead reflect the private sector and consumer interests.

Ronald Wineholt, a spokesman for the Maryland Chamber of Commerce, said the chamber has worked with lawmakers to reach a compromise with the bill.

“We appreciate the openness of the administration in considering our suggestions, but there still are serious issues that the legislative committees need to address before this legislation is acceptable,” he said.

The Chamber has supported a strict nonprofit structure for the exchange, which would be completely independent from the government. Wineholt said legislators also need to restrict the authority of the exchange to levy fees on users. The current language of the bill says the exchange may assess fees on users of the exchange.

Maryland Department of Health and Mental Hygiene Secretary Joshua Sharfstein said he thinks HB 166 is a “much stronger bill” than the original one and said there has been “broad consensus” among different parties to move to a hybrid private-public entity for the exchange.

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