Delegate Tony McConkey's Official Blog

Money Questions Already As Maryland Health Exchange Begins

maryland-health-exchange-beginsMaryland Health Exchange begins and already there is disagreement about how much it is to cost and who is footing the bill

Jul 21, 2015 – State To Recoup $45M It Paid To Build Failed Health Exchange – Sun
May 1, 2015 – Maryland Health Care Exchange Fails Federal Audit – Blog
Mar 14, 2015 – Procurement Violations At The Maryland Health Exchange – Sun
Jan 1, 2015 – States Struggle To Fund Exchanges – Heart
Oct 15, 2014 – Maryland Health Benefit Exchange Keeps Documents Secret – Rptr
Jun 24, 2014 – $90M Cost Of Rebuilding The Maryland Obamacare Exchange – Rec
Jun 19, 2014 – Still Little Transparency In Maryland Obamacare Exchange – Rec
Jun 2, 2014 – Brown Says He Should Have Taken Direct Role In Exchange – Post
May 31, 2014 – Maryland Looks To Connecticut For Health Exchange Answers – Post
May 30, 2014 – Maryland Close To Plan To Fund 2nd Try At Obamacare Exchange – Post
May 21, 2014 – Maryland Obamacare Exchange Violated “Open Meetings” Law – Post
Apr 12, 2014 – Lt. Gov. Anthony Brown Shows Gall By Claiming MD Is ‘Leader’ On Health-Care Reform – Post
Apr 4, 2014 – Down Maryland Health Exchange Rabbit Hole – Post
Apr 3, 2014 – Maryland Obamacare Exchange Refuses Info For State Auditors – Rec
Apr 1, 2014 – Too Broken To Fix MD Obamacare Exchange Votes For Overhaul – Post
Apr 1, 2014 – Maryland Switching Obamacare Website To Connecticut – WBAL
Mar 30, 2014 – Failed MD Obamacare Exchange Is Boon To Insurance Brokers – Rec
Mar 29, 2014 – Maryland Set To Abandon Troubled Health Exchange – Post
Mar 12, 2014 – Finger Pointing Continues On Maryland’s Health Exchange – Sun
Mar 10, 2014 – GOP Calling For MD Transfer To Federal Obamacare Exchange – GOP
Mar 10, 2014 – Federal Government To Audit Maryland’s Failing Health Exchange – Post
Mar 6, 2014 – Atty Gen Criticizes Mismanagement Of Maryland Health Exchange – Post
Mar 1, 2014 – Health Secretary Sharfstein Blames 30M Glitch On Contractor – WBAL
Feb 27, 2014 – Maryland Health Exchange Debacle To Cost The State $30M More – Post
Feb 27, 2014 – Maryland Health Exchange Fails Open Meetings Test – Rec
Feb 24, 2014 – Maryland Finally Fires Obamacare Exchange Contractor – Post
Feb 10, 2014 – MD To Drop Another $33M On Dysfunctioning Health Exch – Sun
Feb 7, 2014 – Head Of Failed Health Exch Given Several Raises Before Being Fired – Sun
Feb 7, 2014 – Court Battle Escalates Over Maryland Health Exchange – Post
Feb 6, 2014 – In Latest Mistake Health Exch Gives Out E-Mail Of PA Woman – Sun
Feb 5, 2014 – To Investigate Health Exchange Start With The Lobbyists – RedMD
Feb 3, 2014 – Dem Leadership Delays Investigation Into Maryland Obamacare – Sun
Jan 30, 2014 – Emergency Law Passed To Help Victims Of Obamacare Exchange – Post
Jan 19, 2014 – Maryland Welcomes Wrong People To Medicaid – Post
Jan 19, 2014 – 1000+ Medicaid Enrollment Packets Sent To Wrong Addresses – Sun
Jan 17, 2014 – Senate To Review Docs In Health Exchange Investigation – Sun
Jan 17, 2014 – Health Exchange Glitch Sends Callers To Seattle Pottery Business – Sun
Jan 14, 2014 – Glitches In Maryland Health Exchange Could Force Abandonment – Post
Jan 14, 2014 – Legal Action Over Botch Maryland Health Exchange? – Biz
Jan 12, 2014 – O’Malley Pressed On CNN About State’s Disastrous Health Exch – Post
Jan 11, 2014 – Officials Were Warned For A Year About Health Exchange Problems – Post
Jan 9, 2014 – Legislature Moves To Rescue Victims Of Maryland Health Exchange – Rec
Jan 8, 2014 – Democrats Turn On Each Other Over Obamacare Botched Launch – BusWk
Jan 7, 2014 – Maryland Dems Weigh Bailing On Maryland Health Exchange – Fox
Jan 6, 2014 – Delaney, Mizeur Call For Look At Ditching MD Exchange – Sun
Dec 19, 2013 – O’Malley Must Refocus On Job One – WYPR
Dec 14, 2013 – Democrats Sharpen Criticism Of Maryland Health Exchange – Sun
Dec 9, 2013 – Balt Sun Calls For Legislative Investigation Into Maryland Obamacare
Dec 6, 2013 – Director Of Maryland’s Obamacare Exchange Is “Out” – Post
Dec 5, 2013 – Lt Gov Anthony Brown Takes Blame For Health Site Woes – Sun
Nov 27, 2013 – Post: State Rollout Led By Brown Has Been An Embarrassment – Post
Nov 27, 2013 – After $200M, 3yrs + 10wks, O’Malley Promises Fix By Mid Dec – Sun
Nov 27, 2013 – Maryland Health Exchange Contractors Sue Each Other In Court – Biz
Nov 19, 2013 – Maryland Obamacare Exchange Struggling With Problems – Post
Nov 17, 2013 – Work-Arounds Necessary To Get Marylanders Health Care – Sun
Nov 13, 2013 – ObamaCare’s Rocky Start In Maryland – MDPolicy
Nov 12, 2013 – Obamacare Forces Bowie State To Cancel Student Health Ins – Campus
Nov 11, 2013 – Sticker Shock For Frederick County Shoppers On Health Exchange – Fred
Nov 5, 2013 – 73,000 More Marylanders Grapple With Dropped Insurance Plans – Sun
Oct 27, 2013 – More Problems, Delaying Small Business Health Exchange – Rptr
Oct 17, 2013 – Delegate Ivey Attacks Lt Gov Brown Over Exchange Problems – Sun
Oct 23, 2013 – Maryland’s Obamacare Health Exchange Hit With Problems – Sun
Oct 1, 2013 – Maryland Health Insurance Exchange Stumbles Out Of The Gate – Sun

“Once you get beyond the slick-looking front page, it looks like something a college kid may have put together in an afternoon. It’s rife with weird programming, verification errors and dead ends,” said Jim Fortney of Silver Spring, who has built some small websites himself and says he supports the health care program. He has been trying to enroll himself and his 12-year-old son on the Maryland site – Baltimore Sun Oct 13, 2013

Many states have opted out of Obamacare for fear of the future expenses in setting up and operating the state exchanges. Maryland took the opposite approach believing the state would benefit by being an early innovator with federal funding. Now as the Maryland Health Exchange begins it appears Maryland bet poorly.

Before the first insurance customer is served we find that the state is on the hook for an unexpected $24 million. State leaders had promised that the total cost of setting up the exchange would be paid for from federal funds and that thereafter the exchange would be self supporting from assessments (taxes) on insurance policies or other self supporting funding, AND SO IT BEGINS. We all knew that Obamacare was going to be a great budget buster but who thought costs would spiral out of control before the Maryland health exchange begins.

Moreover, how could it possibly cost $200 million to set up a web portal to help insurance shoppers to find “low cost” insurance. Examples given were sites like Travelocity that let consumers input different variables and find the best deal on products like plane tickets and car rentals. Sounds great, but a review of the exchange website is nothing like Travelocity, it is pretty basic so why the $200 million price tag?

Also the Maryland Insurance Commissioner has approved policy increases of an average of 25% in the exchange. Why would anyone want to use the exchange if policies will cost 25% more?

SO TO REVIEW: 1) We are spending $200 million to set up a system to help consumers find “low cost” insurance. 2) Insurers say that they need to charge 50 to 80 percent more for policies in the exchanges. 3) Insurance Commissioner only approves 25% increases for the exchange. 4) Maryland is praised because a 25% increase is the lowest increase in the nation. 5) Aetna pulls out of the Maryland exchange because it says it will lose money with only a 25% increase. 6) We find that Maryland is going to have to come up with an extra $24 million to fund the exchange. Stay tuned, it will only get better.


Maryland Health Insurance Exchange To Open This Fall At Cost Of $200 Million

By Glynis Kazanjian, MarylandReporter.Com

The cost of implementing Maryland’s new health insurance exchange program – a component of President Barack Obama’s signature health care law – will reach nearly $200 million as the exchange opens for business Oct. 1.

The $200 million will pay for the program to get underway, and the state is kicking in more than $20 million of that, despite early assurances that federal funds would pay for implementation of the program. Maryland’s goal is to sign up an estimated 150,000 uninsured residents in the first 180 days of the program.

Under the Affordable Care Act of 2010, commonly referred to as Obamacare, states were required to either start their own health insurance marketplace or defer to a program which would be operated by the federal government.

Maryland was out front early when it decided to launch its own state exchange. The O’Malley-Brown administration secured $173 million in federal funds to build the state’s health insurance exchange, the Maryland Health Connection.

To date, Maryland has received $157 million in federal funds, and another $16 million is pending. An additional $24 million in state general funds for fiscal years 2012 through 2014 were also budgeted to cover costs that cannot legally be funded using federal dollars.

The combined funds are to cover the full implementation of the state exchange through June 30, 2014 when the state’s fiscal year ends.

The state will then be expected to cover the costs moving forward, but some limited federal funding may be available. A strategic financial plan for the exchange has not been worked out, but a proposed cigarette tax as one of the main funding streams is being floated by health care advocates. Covering the uninsured also saves money that would be tacked onto existing health policies to pay hospitals for emergency care of the uninsured.

State taxpayers funding $24 million

While $24 million in state funds represents only 12% of the initial costs of the exchange, it is far more than officials initially promised.

“Maryland’s Health Benefit Exchange, which is expected to provide access to health care to over 350,000 Marylanders, is being established using no state funds,” a May 2, 2012 press release from the office of Lt. Gov. Anthony Brown stated.

The Office of Health Care Reform issued a similar statement in March after legislation initially passed both chambers of the General Assembly. The bill allowed the implementation of the state exchange to move forward.

Brown, who is running for governor, co-chairs the Office of Health Care Reform, the agency that has spearheaded the implementation of the exchange. His office did not respond to requests for comment related to the discrepancy.

According to two state officials working directly to set up the exchange, it was common knowledge when funding was discussed that some state funds would be needed to launch the state exchange, even as early as 2011.

Need for state funding called common knowledge

“We knew all along that there were going to be Medicaid funds [needed] from the state,” said Sen. Thomas (Mac) Middleton, a Charles County Democrat who is chairman of the Senate Finance Committee. “The state’s always been required to pay a portion of Medicaid.”

Middleton is referring to the matching funds the state must provide when receiving federal Medicaid funds.

When all the initial federal money comes in, the state will have received $55 million in exchange funding from Medicaid. This will have been predominantly used to establish the exchange’s program for eligibility and information technology.

“Everybody always knew the navigator [positions] couldn’t be funded by federal funds,” said a legislative staffer who would only speak on background. “This was no secret. It was abundantly clear.”

“Navigators” are Maryland Health Connection personnel who will be trained to handle eligibility determination and enrollment for all consumers, according to Carolyn Quattrocki, executive director of the Office of Health Care Reform. This includes people applying for Medicaid and all qualified health plans, including people seeking tax subsidies to buy health insurance.

Under the Affordable Care Act (ACA) navigator positions can’t be funded through federal grants, Quattrocki said.

According to the Department of Legislative Services, between fiscal years 2012 and 2014, $24 million in state general funds has been appropriated for health benefit exchange programs. In December of 2011, when the governor submitted his budget for fiscal 2012, he put no money in for the exchange; $1.7 million was later added through a deficiency appropriation, but not until 2013. For his fiscal 2013 budget, the governor included only $1.9 million for the exchange. $6.1 million for fiscal 2013 was added later that year through a deficiency appropriation — money added to cover unbudgeted expenses, according to Legislative Services. (See chart below)

Reaching uninsured is top priority

In April, Maryland awarded $24 million in combined state and federal grants to six regional agencies, and local community organizations, to handle outreach, education and enrollment assistance for the Maryland Health Connection. Outreach efforts will be aimed at the exchange’s priority target population, the uninsured. Funding from the grants will create 300 new jobs.

“The priority is to provide access to coverage for those who don’t currently have it,” Quattrocki said. “For many of those folks, it’ll be people who have never had insurance or thought they could afford it or qualify for it. We need to make sure that we overcome the barriers they have to accessing insurance. That means we really have to be very targeted and comprehensive in our efforts to reach all the different racial, ethnic and socio-economic groups because there are uninsured in all of those groups.”

Maryland is estimated to have 750,000 uninsured residents. Exchange officials have a goal of signing up 150,000 uninsured Maryland residents within the first 180 days of enrollment and another 100,000 who may qualify for Medicaid subsidies.

Last week, the Maryland Health Connection announced the opening of its Baltimore City Call Center. Individuals and small businesses interested in learning more about health insurance policies and subsidy qualification can contact the center about enrollment.

Maryland Health Benefit Exchange opens October 1

Enrollment for individuals and families must begin October 1, 2013, according to the Affordable Care Act. Policies for new enrollees will take effect January 1, 2014. The exchange program for small businesses, called the Small Business Health Options Program, or SHOP, will open January 1, 2014, after a delay was announced by the Obama administration. Those policies will begin March 1.

Appropriations for Maryland Health Connection

FY2012 – FY2014 general fund appropriations for Md. Health Benefit Exchange (Maryland’s fiscal year begins on July 1 and ends the following year on June 30. Budgets for the fiscal year that begins on July 1 are passed in the legislative session of the same year between January and April.) Source: Department of Legislative Services

Fiscal Year        Medicaid Matching Funds         Navigator Funds           Total

2012                   $1.7 million                                   $0 navigator                  $1.7 million

($1.7 million was not in governor’s original 2012 budget. $1.7 million was added later in deficiency appropriations.)

2013                    $6.3 million                                 $1.7 million                    $8 million

($1.9 million was in governor’s original 2013 budget. $6.1 was added later in deficiency appropriations.)

2014                      $7.5 million                               $6.6 million                  $14 million

(Funding effective July 1, 2013)


Total                       $15.5 million                            $8.3 million                  $23.8 million*

*A final close out of fiscal year 2013 won’t be available until late August.

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1 Comment

  1. Concerned MD Citizen

    How could this have gone so wrong. O’BamaCare could have been done a lot more simpler. Why did we not just set up a health insurance company that is provided for the citizens by the Federal Government (A lot like Medicaid) however it will be available for adults as well as dependents. This policy would have a charge for the citizens that use the Government Insurance Policy. The cost for the insurance would be subsidized according to the ability to pay (similar to the way it is being handled through the exchanges now). A question still lingers in most Americans minds – If this, O’BamaCare is such a great thing then why are federal politicians EXEMPT from it?


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