Lowering Obamacare rates OK’d by feds; Maryland receives waiver to use tax on insurance firms as subsidy for health care
State officials plan to announce Wednesday that the Trump administration has approved a federal waiver that is expected to stave off increases in health insurance costs for more than 200,000 Marylanders.
The two main sponsors of the legislation designed to control costs under Obamacare confirmed that the federal government has given
Del.
"I'm very pleased that the work of the
Passage of the bills creating the reinsurance plan and seeking the waiver were hailed as one of the chief bipartisan accomplishments of
The plan imposes a one-year state tax on insurance companies and uses that revenue to subsidize the most expensive health insurance claims from policies sold through
If lawmakers had done nothing, officials said, the individual market had the potential to collapse weeks before the
The Republican governor worked with Democratic leaders to cushion the blow to ratepayers in the individual health insurance market after
After the bills passed with bipartisan support, Hogan signed them.
"We faced this crisis together," the governor said at the signing ceremony in April.
According to the
Middleton, a
"One of the problems with the individual exchange is fewer and fewer people [in the insurance pool] and those who stay are high risk," said Middleton, the longtime chairman of the
A spokeswoman for the
Pena-Melnyk said the waiver will allow the state to create a reinsurance program to shore up a market largely made up of self-employed people and proprietors of "mom-and-pop" businesses too small to buy health insurance on the group market.
"You're talking about over
"This will buy us time," she said.
Pena-Melnyk said about
Premiums on individual insurance policies, which serve people who aren't covered through a job or family member and who earn too much to qualify for Medicaid, have shot up in recent years.
The viability of the individual market has been threatened because insurers underestimated the costs of claims and because not enough young, healthy people bought policies to help subsidize the costs of older and less healthy people.
Repeated attempts by President
Middleton said he hopes that by shoring up the individual market, it could eventually be combined with the more stable small group market. But that would depend on reducing the gap between premiums for the two types of plans.
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