Pennsylvania Insurance Department, Deciding to Operate a State Health Insurance Exchange, Releases Concept Legislation
In November 2011, Governor Corbett announced Pennsylvania’s decision to establish a state-run health insurance exchange as required by the Affordable Care Act, rather than defer to an exchange run by the federal government. The exchange will be a marketplace where consumers can comparison shop for health insurance coverage based on their needs and budgets. The exchange will also manage the available subsidies and tax credits for insurance for consumers. The Pennsylvania Insurance Department (Department) estimates that 2 to 2.5 million Pennsylvanians would participate in a health insurance exchange in 2014 (excluding individuals eligible for Medicaid or CHIP). These are conservative estimates but reportedly provide a reasonable foundation for the volume of consumers expected to participate in the exchange.
Legislation consistent with Governor’s Corbett’s vision is expected to be introduced very soon. In late January 2012, the Insurance Department announced its vision for a state-operated exchange and released a 32-page conceptual draft. The proposed bill would establish multiple, private exchanges; a model very different from other states which have proposed no more than two exchanges operated by either state government or a quasi-government authority. Any private entity meeting the exchange criteria would be certified, and be permitted to sell qualified health insurance plans and other types of insurance including auto and home-owners.
The statute provides for the establishment of an advisory council made up of twenty-one members to advise the Insurance Department on a number of issues regarding the Exchange. There would be only four consumer representatives on the Advisory Council: one representative who is not a medical provider or insurer, one consumer who purchases individual health insurance, and two small employers. In contrast, there would be three representatives of health insurers and two representatives of insurance brokers.
PHLP is concerned about the multiple exchange approach and with Community Legal Services co-authored comments critical of the proposed model. We appreciated the Department’s desire to create an Exchange unique for Pennsylvania, but discouraged the use of multiple Exchanges. To view our comments, click here. To view the Department’s conceptual draft, click here.