Maryland State Wire

The U.S. Center for Medicare and Medicaid Services (CMS) approved Maryland's 1332 State Innovation Waiver, which will create a statewide reinsurance program to help offset the cost of insurance in the state.

Andy Ratner, the chief of staff for Maryland Health Benefit Exchange, said the new plan will provide $463 million in the first year to lower the cost of insurance.

"The way the program works is, like all insurance and particularly health insurance, there's a small number of people whose claims are enormous because of medical issues, so that drives up the cost," Ratner told Maryland State Wire. "This money will be used to offset those highest claims so that the insurance companies will be able to keep their rates for everyone lower because they know their high risks [claims] will be covered."

Ratner said the estimated impact of waiver costs for residents is that it will cut rates by roughly 30 percent of what they would otherwise be.

"Some people could see rates in some cases lower than they were this year," Ratner said. "At the very least, the increase — if there is an increase — should be much smaller than they've seen in the past few years."

Those who are on the individual Market for insurance will benefit the most from this plan, Ratner said.

"The people who are outside of that window didn't get financial assistance but still had to buy on the individual market were getting hit with these major increases and so, in particular, these people will feel the greatest impact," he said.

There are roughly 150,000 people on the individual Market through the Maryland Health Exchange and another approximately 100,000 who get insurance on the individual Market off of the Exchange.

"Those 100,000 or so, and a few that are actually on the Exchange that don't get financial assistance will be the ones who benefit the most," Ratner said.

Ratner said the plan will have a lasting effect on everybody's insurance because it's money going into the system that will help lower the cost.

"The more people who have insurance the fewer people going to the emergency room without insurance that the hospital then, in turn, has to spread to everyone else to cut the cost," Ratner said.

The picture today of Maryland with a Republican governor and Democratic leaders for the state Legislature getting together for a press conference to help try to solve the issue of health insurance is a good thing, Ratner said.

Gov. Larry Hogan said in a news release that the health insurance market in Maryland will now have a chance to be "competitive and dynamic."

"These cost reductions and this competition will lead to more insurers entering the market and make health care more affordable for all Marylanders," Hogan said.

Hogan and state Legislature developed the plan and passed House Bill 1795. The plan was signed by Hogan on April 5.

The legislature required the Maryland Health Benefit Exchange to submit a waiver under the Affordable Care Act to U.S. Secretaries of Health and Human Services and the Treasury to establish the program.