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Down payment option proposed to replace individual mandate

The Daily Record
January 9, 2018
Tim Curtis

Maryland Democratic state legislators released the first piece of their plan to combat moves President Donald Trump and congressional Republicans have made over the past year to undermine the Affordable Care Act.

Sen. Brian Feldman and Del. Joseline Peña-Melnyk will introduce legislation that would institute a state-level individual mandate. Payers could then choose to use that penalty as a down payment to purchase health insurance on the state health exchange.

“We do not want to move backward,” Feldman said at a news conference. “We have a mandate, but we don’t stop there. … Instead, we’re presenting those same folks with the opportunity to make a rational economic decision.”

Legislators and advocates at the news conference said they hoped the down payments, in addition to federal advanced premium tax credits that help lower-income people pay for coverage, would allow more than 60,000 people in the state to gain health insurance.

Under the proposal, the Maryland Health Connection would be responsible for reaching out to people who pay the penalty to help them find a plan. At the end of the open enrollment period, the health connection could automatically enroll those people if there is a no-cost option available when tax credits are taken into account.

If a person does not use the penalty as a down payment, they would lose the money to a health insurance stabilization fund.

The Democrats hope that this legislation will be one of several bills coming forward this year to address changes at the federal level.

Last year, Republicans in Congress passed a tax cut bill that also repealed the individual mandate, a key component of the Affordable Care Act. The mandate requires people who do not purchase health insurance to pay a penalty. That penalty will go away during the 2020 tax season.

Trump also moved to shorten open enrollment periods and take away subsidies for health insurance providers.

Maryland Republicans do not see these changes as the greatest health insurance issue in the state. Instead, Del. Kathy Szeliga, R-Baltimore County, said, she was worried about the affordability of insurance for owners of businesses too small to join the small group market.

“You’re not helping small business entrepreneurs who are going out on their own who start small like that. You’re killing them,” she said. “People in Medicaid are taken care of. They’ve got subsidies, the taxpayers are taking care of that. Other people in this individual market, it’s unaffordable.”

Szeliga, the minority whip, referenced a friend who pays $2,400 a month in premiums with a $13,000 deductible. She said focusing on the protecting the Affordable Care Act from changes would continue to miss these type of people who have found health care to be unaffordable.

“‘Oh, yeah, let me keep my fee to pay towards the $50,000 health insurance premium that I can’t afford,” she said. “They’re just deflecting. The real problem is affordability. The Affordable Care Act has created a very unaffordable insurance rate for small business owners.”

Szeliga said the legislature should focus on bringing back high-risk pools and allowing small businesses to form associations to buy group health insurance.

Since the Affordable Care Act was implemented in 2010, Maryland’s uninsured rate has fallen around 5 percentage points to over 6 percent.

Democrats said they will move quickly on their health insurance priorities.

Sen. Thomas M. “Mac” Middleton, D-Charles, chairs the Senate Finance Committee, which has jurisdiction over health insurance legislation. He said his committee will begin considering options to stabilize health insurance, including the down payment plan, beginning next week.

The Maryland Health Insurance Coverage Protection Commission, co-chaired by Feldman and Peña-Melnyk, released its report this week and the down-payment option will be just one proposal legislators consider. Proposals for reinsurance and a basic health program were also recommended by the report.

But unlike some of those other options, implementing a state-level mandate to replace the federal mandate when it goes away is something the state can do on its own. Other options would require waivers or other forms of cooperation from the federal government.

The Democrats at Tuesday’s press conference also said they wanted to include Republicans, including Gov. Larry Hogan. But they also acknowledged they did not reach out to Hogan or other Republicans prior to the press conference to discuss the legislation.

“I’m usually much more in favor of providing incentives rather than punishment or penalties, as we are doing with any number of things,” Hogan said at a press conference Tuesday afternoon. “But if the legislature has some good ideas about what the state can do to make up for problems where Washington has failed or made mistakes that are going to hurt people in Maryland, we’re all ears. We look forward to sitting down with them and listening to what they have to say.”

Republican members of the General Assembly and members of Hogan’s administration were a part of the Health Insurance Coverage Protection Commission.

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