As tough questioning from the U.S. Supreme Court forces proponents of President Obama’s health-care law to contemplate the fallout if it is ruled unconstitutional, Maryland Gov. Martin O’Malley (D) said Wednesday he is unsure how the state would move forward with its own health insurance reforms.

“I don’t know. We’ll deal with that, and we’ll figure out other ways to move forward,” O’Malley told reporters Wednesday.


People participate in a protest in front of the U.S. Supreme Court building on the second day of oral arguments for the Patient Protection and Affordable Care Act on Tuesday. (Mark Wilson/GETTY IMAGES)

As of this month, 10 states and the District have enacted state-based exchanges, according to the National Conference of State Legislatures.

Maryland’s House and Senate passed legislation that would continue the process of setting up the Maryland exchange, which will be funded almost exclusively by federal grants through fiscal 2014. The bill is expected to go to O’Malley’s desk this week.

Republicans questioned whether the state would be on the hook for costs associated with the exchange if a key feature of the federal law — a requirement that Americans either purchase health insurance or pay a penalty — is struck down.

“As Supreme Court justices are deciding the issue, we’re rushing into it,” said Del. Michael D. Smigiel Sr. (Cecil), one of several Republicans who implored Democrats to slow down in creating the exchange, which would take effect in 2014.

But Maryland would not be responsible for the roughly $34 million in federal grants it has received to set up its exchange in the event the federal mandate is overturned, said Carolyn Quattrocki, executive director of the Governor’s Office of Health Care Reform.

“If the mandate is overturned, it won’t affect the part of the law that requires states to establish a health benefit exchange,” Quattrocki said.

But, she said, “If the entire Affordable Care Act is overturned, that presents a broad scope of issues, but I think most people don't think that’s going to happen.”

Although state dollars will not have been used in setting it up, Maryland may not have much to gain from going forward with an exchange if the mandate is overturned, said Del. Shane Pendergrass (D-Howard), vice-chair of the committee that advanced the health exchange bill.

“There would be a question as to what benefit it provides,” Pendergrass said, adding the mandate goes hand in hand with new regulations on insurers, such as a prohibition against insurers turning away people with preexisting conditions.

“I don't think we know anything until the Court answers their questions,” Pendergrass said. “But if we do not move forward, we will miss deadlines and will not be eligible for federal money in setting up the exchange.”

While acknowledging uncertainty, O’Malley said Maryland would continue to be aggressive in making changes to its system even if the federal law suffers a setback.

“If we’re left in a position of having to go with a state-by-state approach with federal partnership, I think you can anticipate that Maryland will be a state that’s in the forefront of those states that move forward,” he said.

But O’Malley said that he expects the federal law to be upheld.

“I think they’ll affirm it, frankly. I think it’s hard for them to say that an individual mandate’s okay when it comes to auto insurance but it’s utterly unconstitutional when it comes to something that’s as big of a cost driver as health care,” he said.