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MarylandHealth Benefit Exchange seeks balance between state subsidies and reinsurance after federal tax-credit changes
Summary
The exchange told lawmakers it launched a state premium assistance program to offset the end of enhanced federal premium tax credits, which helped blunt enrollment losses but left some consumers shifting into higher-deductible plans; MHBE said it will model FY27 subsidy parameters and monitor reinsurance solvency.
The Maryland Health Benefit Exchange (MHBE) told the appropriations subcommittee that state action this year helped blunt the worst impacts of the enhanced federal premium tax-credit expiration, but that ongoing enrollment and affordability risks remain.
DLS analyst Victoria Martinez said the fiscal 2027 MHBE allowance increases sharply (roughly $140.7 million) to support two major programs: the reinsurance program and the newly implemented state premium assistance program that took effect in calendar 2026.
"Exhibit six shows sample monthly premiums," Martinez said during her presentation, noting a roughly 13% average premium increase in 2026 and DLSconcerns about how MHBE will ensure reinsurance solvency while funding the subsidy program from the same assessment revenue stream.
MHBE operations and the board's options
Executive Director Michelle Eperly described operational innovations (AI agents handling password resets and enrollment-status queries, a new small-business portal) and credited the state's premium assistance program for helping the state register 3% enrollment growth for 2026 open enrollment.
"Marylanders really want health coverage and they will do what they need to do to keep their health coverage," Eperly told the subcommittee, while warning that many consumers "bought down" into plans with higher deductibles to keep premiums affordable.
Johanna Fabian Marx, MHBE deputy director, told the committee the exchange will model several subsidy scenarios before the board sets parameters for plan year 2027. She said staff and board members can use tools such as narrowing program eligibility or closing the subsidy to new enrollees through special-enrollment periods if spending threatens reinsurance solvency.
Populations losing federal assistance
Committee members asked about the impacts on lawfully present immigrants and DACA recipients. MHBE staff said two tranches of people lost access to federal assistance under new federal rules; many of those people have limited affordable alternatives and may rely on federally qualified health centers, pay out of pocket or forgo care.
What the committee requested
DLS recommended and committee members requested a follow-up report on MHBEreinsurance and state subsidy cost forecasts and modeling assumptions. MHBE said it will provide additional budget and modeling materials as the board finalizes calendar-year-2027 parameters this summer.
