Maryland's Health Care Shift: Higher Costs Ahead?

Major Shift in Healthcare Payment Starting 2028

Maryland is implementing significant changes to how hospitals are paid, introducing the AHEAD model set to begin in 2028. The state will relinquish control over setting Medicare rates, handing it over to the federal government.

Private Insurers Express Concerns

Private insurers are unhappy with the changes, fearing increased healthcare costs. Matthew Celentano from the League of Life and Health Insurers in Maryland stated:

"We are worried. Health care costs are already too high for many families and businesses."

End of Total Cost of Care Model

The old system, known as Total Cost of Care, ended on December 31. This system ensured uniform payment for hospital services. However, the new model will allow hospitals to charge private insurers more, potentially raising premiums by 1.8% by 2032.

Medicare Advantage Challenges

Medicare Advantage, which covers additional services like vision and dental, is also affected. About 25% of Maryland Medicare recipients use this insurance. However, insurers are leaving the state, citing the current system as too costly.

State's Efforts to Mitigate Issues

To retain insurers, Maryland will lower the rates they pay hospitals starting in 2027 by approximately 11.55%. However, private insurers will need to compensate for this difference, leading to a potential 2.55% increase in their rates by 2032.

Workgroup Formed to Address Transition

The state has established a workgroup to manage these changes. Health Secretary Meena Seshamani acknowledged the challenges ahead:

"We have a lot of work ahead of us."

Uncertainties and Concerns

Despite these efforts, uncertainties remain. Gene Ransom, CEO of MedChi, questioned:

"What happens between now and 2027?"

The transition to the AHEAD model is not smooth, and there are many uncertainties to navigate.