Pennsylvania and Health Insurance Exchanges – What’s Next for Our State?

The deadline for states that have yet to make a decision on whether to run their own health insurance exchanges as required by the federal Affordable Care Act was extended until December 14, 2012 by the U.S. Department of Health and Human Services (HHS) last week.  This extension was granted because many states with Republican governors put off the decision prior to the election in hopes that presidential hopeful Mitt Romney would win and repeal the law.  Such is the case for Pennsylvania.  With the election over, it is clear that the law will remain intact under the Obama Administration.  Whether one agrees or disagrees with the overall concept of the plan, it is here to stay and it is time that Pennsylvania moves forward with implementing a health insurance exchange.

The online health-insurance exchanges are meant to be simplified health-insurance markets for individuals and small businesses and to make markets more competitive by allowing consumers to more easily compare insurance plans.  Open enrollment for exchange plans are scheduled to start October 1, 2013, with coverage effective January 1, 2014.

States have three options when it comes to who will run their health insurance exchange:  each state can run their own exchange, join in a partnership with the federal government or opt to have HHS run their state’s exchange completely.  For the states that decide to not run their own exchange, they have until February 15th to decide whether to work with a partnership or cede their exchange entirely to Washington.

If a state does not establish their own exchange, the federal government will impose one on them.  However, the failure to build an exchange by 2014 does not preclude Pennsylvania from building one later.

The partnership option allows states to handle consumer relations and oversight of health plans, while the federal government does the bulk of the work, including handling enrollment and figuring out how much taxpayer-funded help consumers may be entitled to.  However, many individuals and hospitals feel that each state has their own insurance markets and knows what is best when it comes to their consumers; therefore, a state run exchange makes the most sense.

The Corbett Administration has claimed that they have delayed the development of the online exchange because too many questions about its cost and other operational details remain unanswered.  Meanwhile, the Pennsylvania Insurance Department was awarded a $33.8 federal grant earlier this year to help with the exchange planning.  Officials have acknowledged that none of this federal money has been used thus far to establish an exchange.

The decisions do not end with the establishment of the insurance exchanges.  Another big choice the governor has yet to decide on is if Pennsylvania will expand eligibility limits for Medicaid.  This state-federal run program provides medical care for the poor, disabled and elderly.  The federal government is charged with picking up the majority of the tab for our state to expand the eligibility, but if Pennsylvania decides to opt out, the state leaves federal money on the table. It is believed that an estimated 650,000 Pennsylvanians would get Medicaid coverage if the state decides to expand the eligibility.

More than 30 million uninsured Americans are expected to gain insurance coverage under the Affordable Care Act with one million of those individuals living in Pennsylvania.  The Administration has delayed the decision long enough and we should not tolerate the governor’s indecisiveness any longer.  By investing in insurance coverage, people are better able to manage their health and avoid unnecessary and expensive trips to emergency rooms and the doctors.  The time is now for our state to move forward so that everyone can have access to affordable and quality health care.