Maryland Lawmakers Push First State Alternative to Health Mandate
Maryland state lawmakers want to create a state-level alternative to the federal insurance mandate that would aim to bring more consumers into the state’s health insurance exchange.
State legislators on Tuesday released a plan that would require Marylanders without health insurance to pay a penalty to the state for not having health coverage once the federal fine for not having coverage is removed in 2019. Instead of the state collecting the fine, however, Maryland Health Exchange, the state’s insurance marketplace, would use the penalty as a downpayment to enroll the person in a health plan unless they chose otherwise.
The plan is similar to an auto-enrollment system, and is the first proposal from state legislators for a state-level alternative to the mandate since Congress effectively repealed the requirement under the 2010 health care law (PL 111-148, PL 111-152) late last year. The Maryland plan is expected to be introduced as legislation as early as next week.
“It’s a way to build on the Affordable Care Act and make it better by saying, ‘If you’re uninsured, we’re not just going to punish you. We’re going to help you get insurance,’” said Stan Dorn, a senior fellow at Families USA who helped craft the plan.
Congress effectively repealed the individual mandate in the tax bill signed into law last year. The 2020 tax season will be the first tax season during which people would not pay the federal penalty for not having insurance, so that is when the Maryland lawmakers working on the issue envision their plan would take effect.
Under the plan, Marylanders without health coverage during 2019 would pay a penalty to the state. Unless the person opted out, the insurance exchange, using the individual's tax return, would look to sign that person up for an available policy that, using the penalty as a downpayment and premium tax credits they may be eligible for, would not cost that person additional money. If such a plan isn’t available, the penalty would be available to the individual to spend during the following open enrollment period.
For consumers who do opt out of using the penalty as a downpayment, those funds would go toward stabilizing the insurance market.
Brian Feldman, the state senator who plans to introduce the legislation, said the plan is a way of getting more people in the state insured, rather than just implementing a requirement for coverage.
Feldman said in an interview Monday that he hadn’t spoken with GOP Governor Larry Hogan but supporters hope Hogan would be open to the legislation. Hogan’s signature on a governors’ letter to Congress over the summer to Congress opposing the so-called “skinny repeal” bill that would have repealed the mandate suggests that he understands the importance of the mandate in the insurance market, Feldman said.
“We’ve been out in front in the last year or so in the health care space, in prescription drug pricing, I think now the Affordable Care Act,” Feldman said. “The politics of our state legislature, politically, is probably well-suited to be out front on this.”
Health policy experts have warned that rolling back the mandate could cause premiums to rise, particularly if more young and healthy consumers opt to go without coverage. This plan could help reverse that, Feldman said.
Officials in at least a few states have floated a state-based individual mandate as an alternative to the federal requirement once it is effectively repealed in 2019. Dorn said he had spoken with people in a few other states about a similar idea to the Maryland plan. States that oversee their own exchanges and have a state income tax system would be able to set up this type of system, he said.
The proposal would make it more clear to consumers that affordable coverage is in their reach, he said.
“This is a confusing, complicated situation,” Dorn said. “And this is a way to put that choice right of the consumer.”