Maryland Governor Martin O'Malley is expected to sign legislation expanding Medicaid eligibility and funding the state health insurance exchange with funds from an existing insurance tax.
The Maryland Health Progress Act, which recently passed the state House and Senate, would be one of the final steps in the O'Malley Administration's health reform plans and implementation of the Affordable Care Act.
The bill expands Medicaid eligibility, effective January 2014, to include children ages 6 through 18 and all adults younger than 65 with household incomes up to 133 percent of the federal poverty level, which is about $31,000 for a family of four.
Currently in Maryland, jobless parents with dependent children making up to 116 percent of the federal poverty level are eligible for Medicaid, while some non-disabled childless adults with low-incomes are eligible for publicly-financed primary care services.
Maryland's Medicaid program under expanded eligibility is projected to cost about $427 million for fiscal year 2014, with $349 million coming from the federal government. That would more than double to $1 billion by 2018, with state's share rising to about $164 million.
The bill also establishes a funding stream for the Maryland Health Benefit Exchange with revenues from the state's existing 2 percent insurance tax, which generated just over $300 million in fiscal year 2012, according to Maryland's Department of Legislative Services.
Starting in fiscal year 2015, under the bill, the Governor would direct at least $10 million from the insurance tax fund to the exchange, for operations and administration. Starting in fiscal year 2016, the Governor would direct at least $35 million, with unspent monies going back to the state's general fund. (The bill exempts the state's ACA-created nonprofit CO-OP health plan from the tax until June 2018).
O'Malley's proposed fiscal year 2014 budget would fund the Maryland Health Benefit Exchange with about $85 million, with about $71 million in federal funds and $14 million in general state funds.
Largely funded with federal grants so far, the HIX is expected to require $70 million to operate in fiscal year 2015, and then $63 million in subsequent years.
Applications from insurers that want to sell on the exchange are due in May, just as public outreach and education campaigns start, with the certification of qualified health plans beginning in July. The Maryland Health Benefit Exchange also pushed back the beginning of the small business SHOP exchange by several months, with open enrollment beginning in January 2014 rather than this October.