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Maryland Limit on What People are Allowed to Spend on Their Health Care Drive Major Insurer Out of State Health Exchange

by | Aug 7, 2013

By Jennifer Popik, JD, Robert Powell Center for Medical Ethics

Pro-abortion President Barack Obama

Pro-abortion President Barack Obama

This week the Aetna insurance company announced that it will not offer a health insurance policy in Maryland’s state Obamacare “exchange” because state regulators have placed such severe limits on what Marylanders will be allowed to spend for health insurance that the company cannot provide an adequate health insurance plan under them. The concern is that only that other insurers will pull out of Maryland but that this may be the case in other states as well.

Since January, the federal Department of Health and Human Services has been gearing up in a multi-phase effort to roll out state “exchanges.” The exchanges are an essential component of the 2010 Obama Health Care Law (“ObamaCare”). They were designed to be marketplaces through which individuals and employees of small businesses (and, later, employees of large employers) could choose their health insurance plan.

Originally, state-based exchanges were designed to allow people to take the insurance money their employers typically kicked in and use it to “comparison shop” among all exchange insurance plans that provided basic benefits.

However, consumers are only going to be able to choose from plans offered by insurers who do not allow their customers to spend what state bureaucrats deem an “excessive or unjustified” amount for their health insurance. (See .)

This week, the Baltimore Sun reported that there is proof this is beginning to happen:

“Aetna Inc. said Friday it canceled plans to sell insurance on Maryland’s new health insurance exchange, set to open Oct. 1 as part of the federal health care reform law, after regulators cut the rates it could charge consumers for its plans. Aetna told Maryland Insurance Commissioner Therese M. Goldsmith in a letter this week that cuts regulators made to the rates the companies had proposed ‘would not allow us to collect enough premiums to cover the cost of the plans.’”   (See

This problem will not be unique to Maryland. Under the 2010 health law, every state will have a state exchange. States can set one up and run it or run one along with the federal government. In states that fail or refuse to do so, the Federal government will set up one for them.

Fewer than half of states had indicated they would be setting up their exchanges by the December 2012, deadline, although they would not be prohibited from setting one up at a later date. This means that the federal government will totally or partially run a majority of state exchanges–and control rules regulating what plans get to participate.

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Enrollment for certain groups is set to start this October. But in Maryland, they will have fewer options because Aetna can no longer feasibly offer plans.

The concern is that it will not be long before other insurers pull out of Maryland and other state exchanges when their rate increases are deemed “excessive.”

When the government limits what can be charged for health insurance, it restricts what people are allowed to pay for medical treatment. Why not leave it to consumers to balance what they are willing to pay against the benefits a plan might offer?

It is important to continue to talk about the many dangers of the Obama Health Care law, particularly as the exchanges begin to roll out. It is crucial to warn others about the dangers these health care exchanges pose in restricting what Americans are permitted to spend to save their own lives and the lives of their families.

Note: the abortion related provisions dealing with the state exchanges can be found here:

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Categories: ObamaCare