Health Benefit Plan Contracting: A Background Paper
August 18, 2011
The Affordable Care Act (ACA) requires states to either establish and operate a Health Insurance Exchange by 2014 or participate in the federal Exchange. On April 12, 2011, Governor O’Malley signed the Maryland Health Benefit Exchange Act of 2011, which established Maryland’s Exchange as an independent unit of the state government. The Act also established a Board of Trustees to oversee the Exchange. The Hilltop Institute was commissioned to develop a series of background papers in order to assist the Board in planning for the implementation of Maryland’s Exchange.
This paper provides background information on health plan contracting to the Maryland Exchange Board Advisory Committee and to provide foundational support for the analysis conducted by the vendor selected to perform the study. This report first provides an overview of health plan certification under the ACA and associated regulations recently proposed by the U.S. Department of Health and Human Services. It then describes Maryland’s individual and small group health insurance markets; the Maryland Insurance Administration’s premium rate review process; the non-selective form of contracting currently used by Maryland’s HealthChoice program; and the procurement process employed by the Maryland Department of Budget and Management to select health benefit plans offered to Maryland state employees, retirees, and their dependents.