Tuesday, September 7th, 2010 - 9:59
Tuesday, September 7, 2010 - 09:45
Maryland has been one of the most aggressive states in its efforts to implement health reform. In a "Q and A" session, Maryland Health and Mental Hygiene Secretary John Colmers discusses the state's efforts to implement the new law, including an interim report that found the state would save more than $800 million over 10 years.
Q: What is the state doing to prepare for the establishment of insurance exchanges in 2014?
A: It’s a relatively brief period of time away. A lot has to be accomplished between now and then. There are a number of decisions that are yet to be made that are going to affect what it is we are going to do. We have already begun planning work (the interim report to the governor can be found here). The first thing we’ve done is to create the Health Insurance Exchange and Insurance Market workgroup, one of six workgroups tackling different elements of health reform. They have had their first set of meetings. They will be preparing a report sometime in October. We will begin taking the work from all the workgroups back to the full council. There are a range of issues: the structure of the exchange, where will it be housed, whether these will be government entities or private non-profit entities. At the very least, they will be a place where individuals who are seeking subsidies will need to purchase insurance. We also need to determine how they interact and interface with the Medicaid program.
We are in the midst now of preparing a grant application due this week to the federal government to help support planning work for the exchange. The federal government expects a rapid turnaround, and we hope to begin receiving funds by the end of September to begin the work of planning. The next round of grants from the feds will be an implementation grant, which should occur in early part of 2011. Our goal is to have from the council a recommendation to the General Assembly and governor on how the exchanges should work, with legislation coming in 2011.
Q: Some have said that health reform does not do enough to address the exploding costs of health care. Do the exchanges provide an opportunity to “bend the cost curve” at all?
A: If any of this is going to be sustainable, we have to look at costs. Exchanges can do some insurance reform, can do some in the way of improving efficiencies, but the real reason insurance costs so much is because the underlying cost of health care continues to increase. Benefit plan design can help, and having more people covered generally would be a good thing. But, the more people you have covered the more demand there will be for health services, at least initially. This creates more strain on the health care workforce. So the real challenge is, how do we make sure we move away from a system that, for generations, has focused its attention on paying for the number of services, as opposed to the better they do, the better they get paid. We need to take savings associated with lower utilization of more expensive services, and put that back into primary care. We in Maryland intend to take full advantage of all of those opportunities to participate in demonstration projects.
Q: One of the recurring themes of health reform so far seems to be that many people still don’t know what changes it makes. Can you talk a little about what Maryland plans to do in terms of public outreach?
A: One of the reasons Massachusetts was successful in getting people covered was that they did a tremendous job in educating their population about the changes they made. We have a bit of time. It is educating consumers generally, it’s educating providers, and being able to communicate this in language that people understand.
We hope to learn from insurance providers what has worked in terms of marketing. We are trying to determine the best way for both those who qualify for Medicaid and those who qualify for the exchanges to figure out what they qualify for. Having a central clearinghouse, such as Healthcare.gov, for people to visit and determine what they qualify for might be one way to go.
Q: Maryland has recently increased the income threshold at which people can qualify for Medicaid, something that health reform also requires. Can you talk about how Maryland’s earlier efforts position the state for health reform?
A: Maryland began covering parents up to 116 percent of the federal poverty level, beginning July 1, 2008. That has had a huge impact on us. It has moved us from being among the worst states in the country in terms of access to care for adults to better -- not the best in the country, but far better. If you look at 116 percent of poverty and the way that is calculated for us currently, and the 133 percent under health reform, the two are not that far apart. The challenge is childless adults. They will be a large part of the population to reach out to. For the first three years 100 percent of the cost is covered by the federal government.
Q; Have you learned much from your expansion of Medicaid coverage in terms of reaching that population?
A: We have learned about outreach. We’ve learned what it means when they come in and haven’t had coverage, and why they haven’t gotten it. We have learned that there is a sufficient number of providers that are willing and able to provide care. The Medicaid expansion has put Maryland in a really good position to do well.
Q: The economic downturn has led to a significant decrease in employment in state governments, at a time when health reform has drastically increased states’ responsibilities. Do you have enough staff to do what needs to get done?
A: We don’t have it all yet. One of the components of the interim report is that a financial model will be used to help judge what the likely impact on the state budget will be of reform. All of the additional costs – covering childless adults, covering currently eligible Medicaid individuals for the first time, administrative costs – are all built in. If you add costs and compare with savings, over the first 10 years, the state will be a net beneficiary of $850 million. For example, we’ve been running our own high-risk pool at a cost of $150 million a year. We will no longer need to provide that under health reform because the federal government is doing it. We will get additional dollars in the form of higher taxes – not from any new taxes, but from the fact that each insurance premium has a 2 percent tax on it. If more people are insured, we will get additional revenue. As part of our financial model, we are building in additional cost for staff.