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State moves forward with health care program as Supreme Court questions federal law

As the U.S. Supreme Court heard its third and final day of arguments Wednesday on the constitutionality of President Barack Obama’s health care law, Maryland plunged ahead in preparing the state for the law’s implementation.

Despite concerns that the 2010 Affordable Care Act could be overturned by the Supreme Court, both chambers of the General Assembly have approved bills backed by Gov. Martin O’Malley that lay the groundwork for the execution of the federal law on the state level.

The two bills establish an exchange system beginning in late 2013 designed to help individuals and small businesses find more affordable health and dental plans on the open market. The Senate passed its version of the bill last week, voting 35-12, and the House of Delegates approved its version Monday, voting 94-44.

Under the federal law, every state is required to devise an exchange system or use the model provided by the federal government. Maryland is one of the few states to advance this far in the process of putting its own plan in place.

Federal grant to Maryland funded implementation

The federal government has provided the state with $34 million in grants with $27 million allocated for the establishment of the exchange program and the other $6.2 million awarded as one of six states leading the way in implementing reform. The exchange program would be funded almost exclusively with federal dollars until the end of fiscal 2014.

However, with the fate of the Affordable Care Act in the hands of the Supreme Court justices, Republicans have argued for prudence until the court issues a ruling on the federal law’s constitutionality.

Speaking on the House floor Monday, Del. Michael Smigiel, R-Cecil, questioned what the rush was about.

“This is the biggest big government project this legislature has come out with,” Smigiel said.

Despite objections about its timing, the legislation has received largely favorable reviews from those in the health insurance industry.

Bill Simmons, president of Group Benefit Services of Hunt Valley, which is a major provider of health insurance to small businesses, applauded the legislation. A self-described “right-wing capitalist,” Simmons said the state has incorporated stakeholders and been progressive and transparent in their approach.

“I don’t usually say nice things about politicians, but they went the extra mile,” Simmons said of legislators’ efforts. Simmon’s views have been echoed by other health insurance brokers, who initially feared the exchange program could put them out of business.

The O’Malley administration has been working on the legislation for more than a year, with Lt. Gov. Anthony Brown leading the charge. The passed legislation adopts many of the operational recommendations made by the Maryland Health Benefit Exchange Board formed last spring.

Doubts by Supreme Court justices

However, comments from some Supreme Court justices during oral arguments Wednesday shed doubts on the federal law’s ultimate survival, raising questions about what the repercussions could be on the state level.

Although opponents have mainly taken issue with the individual mandate in the federal law, which would require nearly every American to purchase health insurance, some conservative justices left open the possibility that the entire law could be scrapped.

Justice Antonin Scalia said it was “totally unrealistic” for the court to go through the bill’s more than 2,000 pages and decide item by item which to keep, as lawyers for the Obama administration have suggested. Throwing out the entire bill could create unforeseeable problems for states and insurers across the nation, who have been preparing for the law’s implementation since its passage in 2010.

O’Malley would move forward whatever the ruling

O’Malley, who said he has read parts of the transcripts from the court proceedings, told reporters Thursday that no matter the final ruling, the state would move forward with health care reform in some way.

“I would hope to do this as a country,” O’Malley said. “If this somehow turns into a situation where states opt in or this is only a coalition of the willing, we will be among the states that are willing to partner with the federal government to extend universal health benefits to all.”

O’Malley said implementing health care reform was the state’s best shot at controlling costs and keeping the state competitive as a job creator.

Brown’s Press Secretary Marc Goldberg said that while the administration is following the Supreme Court’s oral arguments, they aren’t reading into them too much.

“There are too many possible outcomes and various ways the court could rule,” said Goldberg, adding that the administration is moving forward with the expectation that the federal law will be upheld.

Although repeal of the individual mandate would not dramatically affect the state exchange program, it remains unclear what the repercussions could be not only for the program but awarded federal grant money if the entire federal law were repealed. The Supreme Court is expected to issue a ruling on the law’s constitutionality in June.

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