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Three insurers offer plans in Maryland's exchange; Average premiums increase by 6.6% for 2023; State funded subsidies still available for young adults
CareFirst (PPO and HMO entities), Kaiser, and UnitedHealthcare offering exchange plans in 2023, with an overall average rate increase of 6.6%. The state’s reinsurance program continues to keep premiums lower than they would otherwise be.
Maryland is piloting a program in 2022 and 2023 that provides additional state-funded subsidies for young adults aged 18 to 34. And “value plans” are available through the exchange, offering some level of standardization in addition to certain services covered pre-deductible.
Maryland runs its own health insurance exchange, which is called Maryland Health Connection. The Maryland exchange uses an active purchaser model, which means the exchange negotiates with insurers and determines which plans will be offered for sale (this took effect in 2016; prior to that Maryland had a clearinghouse exchange, which meant any carrier that offered QHPs in the state could sell policies on the exchange). Within the exchange, each insurer is allowed to offer up to four plans at each metal level.
Maryland was an early adopter of the health insurance marketplace envisioned by the Affordable Care Act (ACA). While many other states waited to see the outcome of the Supreme Court challenge to the ACA, Maryland moved ahead. The Maryland Health Benefit Exchange (MHBE) was signed into law in April 2011, with additional legislation passed in May 2012. The MHBE was later rebranded as the Maryland Health Connection. In December 2012, the Maryland Health Connection was among the first six state-based exchanges to be approved by the federal government.
In 2014 and 2015, Maryland Health Connection allowed people to enroll until the 18th of the month and still get a first of the following month effective date. But that’s no longer the case; enrollments must be completed by the 15th of the month in order to get a first of the following month effective date. (Note that HealthCare.gov no longer has this deadline as of 2022, and instead allows plans to simply take effect on the first of the month following enrollment. But Maryland Health Connection’s website still indicates that they use a 15-of-the-month deadline.)
There are three insurers that offer exchange plans in Maryland, with varying coverage areas:
In 2023, as was the case for the last couple of years, plans are available in Maryland’s exchange from CareFirst (including Blue Choice HMO plans and CareFirst/Group Hospitalization and Medical Services Inc. PPO plans), Kaiser, and UnitedHealthcare (Optimum Choice).
As has been the case in most states, there has been some fluctuation over time in terms of insurer participation in Maryland’s exchange (Table 1 in the Maryland exchange presentation section of this document shows a summary of insurer participation and QHP availability from 2014 through 2018).
In 2014, the first year the exchanges were operational, plans were available through Maryland Health Connection from CareFirst (including several subsidiaries), Evergreen Health (an ACA-created CO-OP), UnitedHealthcare, and Kaiser (this amounted to a total of eight licensed entities, counting all the CareFirst companies). The vast majority of those who enrolled in QHPs selected plans offered by one of the CareFirst companies that participated in the marketplace. The CareFirst options captured nearly 94 percent of 2014 enrollees, followed distantly by Kaiser with about 5 percent, Evergreen Health Cooperative with 0.7 percent, and All Savers (part of UnitedHealthcare) with 0.4 percent.
For 2015, Cigna joined the exchange in Maryland. Insurers offered a total of 53 unique individual policies through Maryland Health Connection, and plans for 2015 were available from United Healthcare, Evergreen, Kaiser, three CareFirst companies, and Cigna.
Those same insurers continued to offer plans in the exchange in 2016. By that point, CareFirst’s total market share in the exchange had dropped to 60 percent, and Kaiser’s had grown to 23 percent.
But at the end of 2016, UnitedHealthcare and Evergreen both stopped offering individual market plans in Maryland Health Connection (as noted above, UnitedHealthcare plans to rejoin the exchange as of 2021). Maryland was one of many states where UnitedHealthcare exited the individual market at the end of 2016. And Evergreen Health was not allowed to sell or renew individual market plans for 2017. The CO-OP had tried to become a for-profit carrier as of 2017, but the transition hadn’t been sorted out in time, and the Maryland Insurance Administration announced on December 8, 2016 that Evergreen Health would not sell or renew any individual plans for 2017, on or off the exchange (group plans could continue in force until their regular renewal date). This was because regulators had not yet worked out the details of the transition to a for-profit entity, and Evergreen had not yet received approval from CMS.
So in 2017, plans were available from CareFirst (including the HMO and PPO entities), Kaiser, and Cigna. As of May 2017, they had all planned to continue to offer coverage in 2018, and Evergreen Health had planned to return to the market for 2018.
But then the investors who had planned to acquire Evergreen Health backed out of the deal, and in July 2017, the Maryland Insurance Administration announced that Evergreen Health was prohibited from selling or renewing any insurance plans. The announcement noted that it was anticipated that Evergreen Health would enter receivership, and that happened in July 2017. As a result, Evergreen plans were not available for 2018 coverage. And in June 2017, Cigna withdrew their its filings for 2018 and confirmed that they would not offer plans in the Maryland exchange for 2018 (according to their rate filing, they had projected having only 705 members at the end of 2017, so their exit did not have a significant impact).
So for 2018, and 2019 insurer participation in Maryland’s exchange was limited to CareFirst (including their HMO and PPO entities) and Kaiser. That continued to be the case for 2020, although UnitedHealthcare (Optimum Health) joined the exchange in 2021, offering coverage in 14 counties.
CareFirst (HMO and PPO), Kaiser, and UnitedHealthcare are continuing to offer coverage in Maryland’s exchange for 2023.
Open enrollment for individual/family coverage runs from November 1 to January 15 in Maryland. (Note that the deadline was set at December 15 in some prior years, but the exchange updated its website in the fall of 2022 to clarify that the enrollment window would run through January 15. They also note that the deadline to get a January 1 effective date is December 31; in most states, it’s December 15.
Enrollments or plan changes outside of the open enrollment period require a qualifying life event.
Maryland’s exchange has also been known to announce last-minute extensions to the open enrollment period. The window to enroll in 2022 coverage was initially scheduled to end in mid-January (after ending in mid-December for the previous three years), but Maryland Health Connection announced a last-minute extension at that point, giving people until February 28, 2022 to enroll in coverage.
The average rate increase for Maryland’s individual/family health coverage amounted to 6.6% for 2023. The following average rate changes were approved for each insurer:
“Value plans” continue to be available through Maryland Health Connection, after debuting in 2019. These plans have lower out-of-pocket costs and more coverage for certain services (like office visits) before the deductible is met. In 2020, a third of all exchange enrollees in Maryland selected value plans, and the exchange expects these to continue to be popular in 2023.
Although overall average premiums have increased in 2022 and 2023, premiums in Maryland’s individual market declined significantly for three years in a row (2019 through 2021), thanks in large part to the reinsurance program that Maryland implemented starting in 2019.
For perspective, here’s a look at how average individual market premiums have changed in Maryland in previous years:
Thanks in large part to the state’s new reinsurance program (details below), premiums declined in Maryland’s individual market in 2019, 2020, and again in 2021, and enrollment increased in all three years, reaching a then-record high in 2021 (despite the fact that Maryland was one of only two state-run exchanges that didn’t extend open enrollment past mid-December for those years). Premiums increased modestly for 2022, but the American Rescue Plan’s enhancement of premium subsidies, along with the state’s new program to boost subsidies for young adults, helped to drive enrollment to a new record high in 2022.
For perspective, here’s a look at qualified health plan (QHP) enrollment in previous years through Maryland Health Connection, based on plans purchased during open enrollment (keeping in mind that the duration of open enrollment has fluctuated over the years; it started out at six months, was just over six weeks for a few years, and is now two-and-a-half months):
In 2021, Maryland enacted HB780 / SB729. The new law established a pilot program to reduce the cost of health coverage for young adults in 2022 and 2023, using funding from the state’s reinsurance program.
For adults age 18 – 34 who are eligible for federal premium subsidies, and whose income doesn’t exceed 400% of the poverty level, the state-funded subsidies reduce the amount that the person would otherwise have to pay for their coverage. This presentation explains the details.
The ACA’s subsidies, provided by the federal government, have already been enhanced through 2025 as a result of the American Rescue Plan and Inflation Reduction Act, reducing the percentage of income that people have to pay for the benchmark plan (this is true nationwide). But for young adults in Maryland, the pilot program subsidies reduce that percentage even further.
This is important, as young adults in Maryland (and nationwide) are significantly more likely to be uninsured than older adults. And although the ACA’s subsidy structure has been greatly enhanced by the American Rescue Plan (with those provisions extended by the Inflation Reduction Act), it still tends to make coverage more affordable for older applicants, all other factors being equal (see examples on this spreadsheet, which illustrates the effect of the American Rescue Plan’s subsidy improvements).
The new state-based subsidy stems from legislation (HB196 and SB124) that Maryland enacted in 2020. Those bills called for the state to conduct an actuarial study of a potential state-based premium subsidy. In 2019, Maryland imposed a 2.75% assessment on insurers in order to fund the state’s reinsurance program. The assessment dropped down to 1% from 2020 through 2023, but the 2020 legislation directed the state to conduct a study on the feasibility of splitting the 1% assessment between the reinsurance program and a potential new state-based premium subsidy.
The actuarial study determined that the funding split was feasible. The new subsidy for young adults is being funded by up to $20 million in annual subsidies in 2022 and 2023, using money that would otherwise have gone to the reinsurance program.
Legislation was also introduced in Maryland to create a universal healthcare commission that would have been tasked with designing a single-payer system for Maryland residents, but it died in committee.
In May 2019, Maryland enacted SB802, creating the state’s new Easy Enrollment Health Insurance Program. The state had initially considered an individual mandate, since the federal penalty for not having health insurance was being terminated at the end of 2018. But lawmakers eventually decided to see if a voluntary approach, combined with state enrollment assistance, could work instead (the details for the various options the state considered are outlined in this brief).
A workgroup was tasked with sorting out the details of the Easy Enrollment Health Insurance Program, and enrollment under the program began in early 2020, when residents started filing their 2019 tax returns.
The tax returns include a new question (sample return illustrated in this brief) asking if the filer (and spouse/dependents if applicable) had health coverage during the year. There is also a box where the tax filer can authorize the state to share information from the tax return with the Maryland health insurance exchange in order to determine whether the household might be eligible for free or low-cost health insurance.
As of 2016, there were about 360,000 uninsured Maryland residents. The state estimates that about 120,000 of them were eligible for free health coverage, either via Medicaid, CHIP, or a private health plan in the exchange with premium subsidies that cover the entire premium. The estimate was that another 90,000 uninsured residents would be eligible for premium subsidies in the exchange, although the subsidies wouldn’t cover the full cost of any of the available plans.
The idea behind the state’s new Easy Enrollment program is that they can use automation in an effort to insure as many of these people as possible under existing programs and existing eligibility rules. Nationwide, there are a lot of misconceptions about the availability and affordability of health coverage, and Maryland officials hope that their new program will help to move past those by taking the guesswork out of it. Residents don’t have to know anything about their own eligibility for financial assistance with health coverage, as the state will handle the details as much as possible.
Residents who are eligible for Medicaid or CHIP (and who allow the exchange to use their tax return) are automatically enrolled. Residents who aren’t eligible for Medicaid or CHIP but who are eligible to enroll in a plan through the exchange (with or without premium subsidies) are notified of their eligibility by the exchange. And crucially, they qualify for a 35-day special enrollment period during which they can sign up for health insurance.
This is important because open enrollment ends before the tax filing season begins. So without the easy enrollment program, people wouldn’t be able to enroll in coverage until the coming fall, with coverage effective the next year. Instead, their special enrollment period runs for 35 days after the exchange sends out a notice informing them of their eligibility for coverage (and if applicable, financial assistance).
So each person’s special enrollment period has different dates, since people file their tax returns on different dates and eligibility determinations take varying amounts of time depending on the details. But in general, the idea is to get people enrolled as soon as possible. Under the new special enrollment period, coverage will take effect the first of the month after the enrollment is completed.
Several other states have since followed Maryland’s lead, creating their own “easy enrollment” programs.
In April 2018, Governor Larry Hogan signed legislation that directed the state to seek federal funding for a reinsurance program, designed to reduce premiums in Maryland’s market starting in 2019. The bill directed the state to submit a 1332 waiver proposal to CMS, seeking federal pass-through funding to supplement state funding for the reinsurance program.
Maryland Health Connection’s board voted to proceed with the process of drafting and submitting the reinsurance waiver to CMS. The state’s final waiver proposal was submitted to CMS on May 18, and approval was granted on August 22. The proposals called for a reinsurance program that would cover 80% of claims up to $250,000, and the attachment point (the level a claim has to reach in order to trigger the reinsurance) was estimated to be around $20,000.
According to the waiver proposal, premiums in Maryland were expected to be 30% lower in 2019 with the reinsurance program in place than they would have been without it, and enrollment in individual market plans was projected to be 5.8% higher (because coverage would become more affordable for people who don’t get premium subsidies).
Premiums ended up being 43% lower than insurers had proposed, once the reinsurance program was approved. The state has noted that even with the modest rate increases that were approved for 2023, premiums are still 25% lower than they were before the state implemented its reinsurance program.
And enrollment in the state’s individual market (on- and off-exchange) ended up being 20% higher for 2019 than actuaries had projected it would have been without reinsurance: 212,149 people, as opposed to a total projected enrollment of 171,526 if the state had not implemented its reinsurance program. 157,000 of those enrollees obtained coverage through Maryland Health Connection, which was a 2% increase over 2018’s exchange enrollment. Reinsurance programs are particularly helpful for the off-exchange population, since those enrollees all pay full price for their coverage (premium subsidies aren’t available off-exchange) and the reduction in premiums due to reinsurance helps to make full-price coverage more affordable.
Maryland’s reinsurance program has clearly been even more successful than anticipated. One factor that may have been important: Maryland spent $1 million to advertise the lower premiums that stemmed from the reinsurance program; if people hadn’t been aware of the reduction in premiums, enrollment gains might not have been as significant.
A reinsurance program reduces premiums for full-price plans. This results in smaller premium subsidies, since the subsidies don’t have to be as large in order to keep premiums affordable. The 1332 waiver allows the state to receive the federal funding that would otherwise have been spent on larger premium subsidies, and use it instead to fund the reinsurance program (ie, the savings pass through to the state, which is why it’s called pass-through funding).
The state estimated that the reinsurance program would cost $462 million in 2019, which was the highest-cost reinsurance program in the country as of 2019. Funding for the reinsurance program was expected to come from federal pass-through funding, along with a 2.75% tax on insurers that was assessed in 2019. But it now appears that the federal pass-through funding will cover the total cost, and the state won’t need to use the assessment funding. In 2019, Maryland received $347 million in pass-through funding from the federal government. And in 2020, the state received $447 million. For 2021, the state received almost $475 million, which included additional funding due to the American Rescue Plan.
The 2.75% fee was authorized by SB387/HB1782, and applies to insurers in all state-regulated markets (ie, not just the individual market), including Medicaid managed care insurers, and the revenue generated was expected to be used to cover the state’s portion of the funding for the reinsurance program (the fee does not apply to federally-regulated plans, including Medicare and self-insured plans regulated under ERISA). As noted above, the state opted to divert some of its reinsurance funding to the new pilot program that helps to make coverage more affordable for young adults in 2022 and 2023.
(SB387/HB1782 also limits short-term plans to no more than three months in duration, and prevents them from being renewed at the end of the policy term. And it also places restrictions on association health plans, clarifying that association health plans sold in the state will be subject to state regulations.)
The ACA implemented a similar fee at the federal level, although there was a moratorium on the fee in 2017. The fee did apply in 2018, but in January 2018, Congress imposed another moratorium on collection of the fee for 2019. So the idea behind SB387 was to recoup the money that insurers would have otherwise paid if Congress hadn’t suspended the provider fee for 2019. The insurer assessment only applied in 2019 (to replace the federal fee that was suspended for 2019), but it was projected to generate $365 million in 2019, which the state anticipated would be enough to fund three years of the state’s cost for the reinsurance program. But it now appears that the state will not need to use those funds for the reinsurance program, as the federal pass-through funding will be adequate to cover the costs of the program.
The ACA implemented a federal reinsurance program, but it was temporary and only lasted until the end of 2016. Maryland also had a supplemental reinsurance program in 2015 and 2016, using funds left over from the state’s pre-ACA high-risk pool.
Throughout 2017, the Maryland Standardized Benefit Design Work Group met nine times, considering whether and how the Maryland exchange should implement standardized benefit designs. Some other states require standardized plan designs (Covered California only allows standardized plans), and HealthCare.gov has them once again as of 2023, after previously offering them in 2017 and 2018.
The working group recommended that bronze, silver, and gold plans in the individual market should be standardized, and this recommendation was included in the state’s draft letter to insurers regarding 2019 coverage, published in December 2017. But the final letter to issuers, published in January 2018, noted that the standardized benefit design issue had been deferred for the time being.
The letter clarified that the exchange board might revisit the issue at the later date, and might call on the working group to reconvene, and this was reiterated in late 2018, in Maryland Health Connection’s proposed plan certification standards for 2020. But the January 2019 exchange board meeting confirmed that the possibility of requiring standardized plans had been postponed until at least 2021. And the issue did not appear to come up at any of the 2021 board meetings.
Instead of standardized plans, Maryland Health Connection has opted to offer “value plans,” which have some degree of standardization plus some benefits that are covered pre-deductible on all value plans.
In 2019, Maryland enacted SB 36/HB 127, which created a special enrollment period triggered by pregnancy. Maryland had considered this in the past (2019’s SB662), but the legislation didn’t succeed until 2019.
As of 2020, pregnancy is a qualifying event in Maryland, allowing the pregnant person to sign up for health insurance or switch to a different plan.
The federal government has declined to make pregnancy a qualifying event in states that use HealthCare.gov. But several state-run exchanges, including Maryland, have opted to make pregnancy a qualifying event that triggers a special enrollment period.
When Maryland Health Connection opened its doors in October 2013, things didn’t go well… to put it mildly. The initial rollout of the exchange was a disaster, and Maryland Health Connection ended up scrapping their initial platform and starting over for round two with technology purchased from Connecticut’s exchange. But they had paid Noridian Healthcare Solutions about $73 million to build the website the first time around (other contractors were also paid – the total cost was around $118 million).
The state ended its contract with Noridian in early 2014, and in July 2015, a settlement — avoiding costly and lengthy litigation — was announced that called for Noridian to refund $45 million back to Maryland. The repayment included $20 million initially, and then $5 million annual payments over the next five years.
Maryland Health Connection was criticized for its lack of transparency. News outlets informally complained about inadequate disclosure of website problems, and the Kent County News filed a formal complaint with the state’s Open Meetings Compliance Board. Industry experts, state and federal legislators, and the state comptroller all questioned the mostly closed-door meetings during which exchange officials decided to rebuild the state’s website rather than transition to the federal site.
After 2014 open enrollment ended, Maryland Health Connection underwent an extensive overhaul. The exchange abandoned its old website technology and replaced it with Connecticut’s proven system, fired contractors, and implemented new call center technology. The overhaul cost about $40 million according to the Washington Post.
On top of the technological improvements, Maryland Health Connection used a staggered start to limit traffic in the first several days of 2015 open enrollment. Consumers were able to browse plans anonymously starting on Nov. 9, six days ahead of the start of open enrollment. This was a major improvement over 2014, when consumers were unable to browse plans until after they had created an account with the exchange. Consumers could sign up for coverage at enrollment fairs beginning on Nov. 15 and through the call center on Nov. 16. Several more days of increasing access were planned. However, with the site running smoothly, the exchange was opened to all users two days earlier than planned.
In 2014, Maryland Health Connection had fewer than 100 call center staff, but they increased that to more than 350 during the second open enrollment period. The website also operated smoothly throughout the 2015 open enrollment period.
Maryland Health Connection
Maryland Health Benefit Exchange (MHBE)
Information about exchange planning and development
State Exchange Profile: Maryland
The Henry J. Kaiser Family Foundation overview of Maryland’s progress toward creating a state health insurance exchange.
Health Education and Advocacy Unit, Office of the Attorney General
Serves residents and other consumers who receive health care from a Maryland health care provider or health insurance provider.
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.
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