Maine’s effort to create a new health insurance marketplace for individuals and small businesses got a $6 million boost Tuesday from the U.S. Department of Health and Human Services.

The DHHS awarded grants to Maine and 12 other states to help them set up so-called health insurance exchanges by 2014, a key goal of the federal Affordable Care Act. The money will help pay for the planning and technology needed to launch Maine’s exchange in two years, officials said.

“Small business owners and families searching for coverage will soon have a marketplace to find insurance that’s right for them,” DHHS Secretary Kathleen Sebelius said during a conference call Tuesday. “Already, more than half the states have made significant progress toward creating the exchanges.”

Maine is one of 28 states that made enough progress to win a second federal grant. The federal agency awarded Maine an initial $1 million planning grant a year ago.

Each state must design and launch its own exchange system by 2014, or the federal government will step in and operate one. Maine’s Legislature must approve a plan by late April, when its session ends, to stay on track and meet the deadline, officials say.

Exchanges will let individuals and small businesses shop among competing insurance plans and apply for subsidies that may help them pay for the coverage. Each state will set up rules and minimum standards for the insurance plans available through its exchange.

Maine advocates hope the state’s exchange will reintroduce competition by bringing together new consumers and new insurance carriers.

Maine has just one company offering individual health insurance plans statewide – Anthem Health Plans of Maine – and some subscribers pay $500 a month or more for high-deductible coverage. Companies with small numbers of employees also have limited options and high premiums.

Maine is moving ahead with its exchange plans even though Gov. Paul LePage supports efforts to overturn the Affordable Care Act in court. The U.S. Supreme Court may rule on the constitutionality of the law next summer.

Chiquita Brooks-LaSure, director of coverage policy for the DHHS, said states should keep moving forward with the planning, in part because exchanges have broader support than other parts of the law. “And we’re confident the law will be upheld,” she said.

Joseph Bruno, who chairs LePage’s advisory committee on Maine’s exchange, said it’s clear that the state cannot wait for a court ruling. “You have to be prepared, and that’s all we’re doing,” he said.

Bruno said Maine will need new insurance options when the state-run Dirigo Health Choice program, which covers more than 7,000 Mainers, is phased out in 2014.

The biggest issue for Maine now is deciding what the exchange will look like and who will run it. Three competing plans for Maine’s exchange are moving toward a full-scale legislative debate. The most contentious issues are whether the exchange will be run by an independent agency or by a department in the LePage administration, and whether consumers or the insurance industry will have more influence on an advisory board.

“It’s the governance structure that’s the most controversial,” said Bruno, a former Republican legislator from Raymond.

Bruno’s committee finalized its proposal in September, calling for the exchange to be part of the Department of Professional and Financial Regulation, with an executive director appointed by the governor.

 

Staff Writer John Richardson can be contacted at 791-6324 or at: [email protected]