Maryland reveals prices for small-business plans on new health insurance exchange


Maryland’s small-business insurance exchange will open for enrollment in January, and the prices appear to be lower than those in other states around the country. (ROBYN BECK/AFP/Getty Images)
September 17, 2013

Maryland insurance officials have approved premium rates for plans to be sold on the state’s small-business health insurance marketplace, which will open at the start of next year, according to an announcement Tuesday.

Thirteen carriers have been approved to sell plans on the state’s Small Business Health Options Program (SHOP) exchange, a new online insurance marketplace where employers with 50 or fewer workers will be able to compare and purchase plans for their companies and apply for small business tax credits.

One of the fundamental pieces of the Affordable Care Act, the new exchanges are being set up by 16 states and the District of Columbia and will include separate marketplaces for individuals and employers. States that opted out of establishing an exchange will instead rely on a new marketplace run by the federal government.

In a statement, Maryland Insurance Commissioner Therese M. Goldsmith said the state’s rates “compare favorably” to those approved in other states around the country.

For instance, the monthly premiums for a silver plan (which covers roughly 70 percent of the cost of care) for a 40-year-old non-smoker in Maryland will range from $208 to $435, depending on the insurance company, according to officials. In New York, the same type of individual would pay between $291 and $568 for a similar plan, and in the District, the premiums range from $248 to $408.

“We’re pleased that, just like in our individual market, our rates for small businesses in Maryland will be among the lowest in the country,” Joshua M. Sharfstein, chairman of the Maryland Health Benefit Exchange board, said in an interview on Tuesday.

The rates are on average slightly higher than the ones business owners in Maryland have been paying the last few years. Compared to the current rates offered by insurers signed up for the marketplace, the new rates range from 4.9 percent lower to 14.6 percent higher, continuing a slow but steady rate-hike for small employers.

“These changes in rates are consistent with the year-over-year changes we have seen in Maryland’s small group market in 2012 and 2013,” Goldsmith said.

Sharfstein noted that the plans now cover minimum health benefits as required under the Affordable Care Act, meaning many offer more comprehensive benefits than plans in previous years.

Related: What you need to know when choosing a plan on the new exchanges

Like other states, Maryland is erecting two different insurance marketplaces. The one for individuals is set to open on schedule on on Oct. 1. The rates announced today, on the other hand, cover the exchange for small businesses, which will not open for business until January.

Coverage under those plans will take effect in March at the earliest.

Sharfstein said the state elected to postpone launching the small business exchange to give officials more time to ease the transition for employers, insurers and brokers.

“We are focusing on optimizing our partnerships with people who have a lot of experience selling plans to small businesses, and we felt the extra time would be well spent,” he said in an interview back in June.

Still, that will delay some employers’ access to tax credits authorized by the health care law, which have covered as much as 35 percent of the cost of health plans for the last three years for employers with fewer than 25 workers.

Next year, those credits increase to as high as 50 percent of the cost of coverage—however, the credits will only be available through the new SHOP exchanges.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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