Why It Matters
Maryland’s shift to a new federal healthcare model threatens the state’s ability to regulate hospital costs and could trigger rising insurance premiums, provider exits, and increased uncompensated emergency care costs that counties and individuals would bear. The transition represents a significant loss of state authority over one of the largest sectors of the state economy.
What Happened
Kim Robinson, vice president of state government affairs for CareFirst BlueCross BlueShield, raised concerns about Maryland’s healthcare transition at the Maryland Association of Counties summer conference on Thursday. The state is moving from the Total Cost of Care model, which expired at the end of 2025, to a new framework called AHEAD—Achieving Healthcare Efficiency through Accountable Design.
Under Total Cost of Care, Maryland held authority to regulate hospital costs across all payers, including private insurance, Medicaid, and Medicare, with the Health Service Cost Review Commission setting rates. State officials signed an agreement with the Biden administration in 2024 to preserve this regulatory power.
The Trump administration, however, decided early last year to renegotiate the agreement’s terms. The AHEAD model will eliminate the state’s authority to set Medicare rates beginning in 2028, ceding that power to federal negotiators. Robinson expects the federal government will contribute less financial support under AHEAD than it did under the previous arrangement.
Under AHEAD, commercial insurers will continue paying hospitals at rates determined by private negotiation rather than state regulation. Robinson predicted that without state rate-setting, costs for counties, individuals, and businesses will increase. She warned that rising healthcare expenses could expand the uninsured population, in turn increasing uncompensated emergency care—costs typically absorbed by hospitals and taxpayers.
The official also flagged the risk that private insurers or hospital systems could withdraw from Maryland’s healthcare market due to the uncertainty surrounding AHEAD’s implementation. Critically, the model requires hospitals to voluntarily agree to participate; if key providers exit, the entire system could fracture.
Robinson told the conference, “We’re pulling little blocks out of this particular structure, and what we want to make sure is we don’t pull that one block that’s going to make it all fall down.” She added: “It only works when all of the players remain in the game. As soon as one of those entities pulls out, the model collapses.”, as first reported by the Maryland Matters
By the Numbers
End of 2025 — expiration of Maryland’s previous Total Cost of Care model
2024 — year Maryland signed agreement with Biden administration to maintain state rate-setting authority
2028 — year AHEAD model removes Maryland’s Medicare rate-setting power
Zoom Out
Maryland’s healthcare regulation system has long been an outlier nationally, granted special federal exemptions to set rates across all payers rather than operating under standard Medicare and Medicaid payment rules. That model emerged from the state’s history of high healthcare costs and gave Maryland tools to manage system-wide expenses. The shift to AHEAD reflects broader federal policy debates over state versus federal control of healthcare spending and pricing—tensions that have intensified as administrations change and reprioritize healthcare policy.
The uncertainty surrounding the model’s success also reflects the broader challenge facing state officials navigating policy transitions when federal agreements are renegotiated between administrations with different priorities.
What’s Next
Maryland faces a two-year window to address structural questions before the AHEAD model removes its Medicare rate-setting authority in 2028. State officials will need to negotiate with the Trump administration on implementation details and determine how to manage potential provider exits or cost increases. The state’s ability to retain major insurers and hospital systems in the market during the transition will be critical to preventing the system collapse Robinson warned against.