Health insurance exchange in Pennsylvania unlikely

(Pittsburgh Post-Gazette) Pennsylvania’s chances of having an online, in-house health insurance exchange up and running by this time next year are slim to none — and slim, according to the state’s insurance commissioner, may have just left town.

“For us to have something up and running by next year will be very challenging, if not impossible, given that we have no legislation” from the state, and little direction from the U.S. Department of Health and Human Services, said Insurance Commissioner Michael Consedine.

Health insurance exchanges — online clearinghouses where people can compare and buy individual health policies, one of the hallmark features of President Barack Obama’s 2010 Affordable Care Act — are supposed to be up and running by January 2014. States have the option of building and maintaining their own exchange, or letting the federal government operate it for them.

In November 2011, Republican Gov. Tom Corbett announced his “commitment” to building a state-run insurance exchange rather than let the federal government operate Pennsylvania’s exchange. But that commitment has been undermined, Mr. Consedine told the Post-Gazette, by HHS’s failure to answer states’ questions about the operational details of the exchanges.

By Nov. 16, the states that intend to have their exchanges operational by January 2014 are supposed to submit exchange blueprints to the federal government, a deadline Pennsylvania evidently will not meet.

“The clock is really ticking down,” Mr. Consedine said. “We’re not going to rush to build something that doesn’t work.”

Health reform advocates, eager to see the exchanges put into use, have suggested that some states have delayed the heavy lifting until after the election. Why spend time and money building something Republicans say they want to scrap?

“We’re a little disappointed that the current administration is dragging their feet on this, in essence playing politics with people’s health care,” said Antoinette Kraus, project director of Pennsylvania Health Access Network.

But Mr. Consedine says that’s not the case, and that the state Insurance Department is an apolitical organ.

“Everybody wants to insert politics into this,” he said.

However, in July, the Republican Governors Association sent a letter to Mr. Obama seeking “clarification on critical outstanding questions” on the exchanges and Medicaid expansion that was also part of the 2010 health insurance overhaul.

Pennsylvania’s Insurance Department sent its own letter to HHS in August asking for answers to more than two dozen questions about financial support, forthcoming rules and “other primary concerns confronting the commonwealth.”

Mr. Consedine also testified last month before the U.S. House Committee on Ways and Means, telling the committee that “we still lack clear direction, and the flexibility promised us has not materialized. … January 2014 is right around the bend.”

Other states, Mr. Consedine noted, are in the same boat, demonstrated by the fact that 22 states have signed up to participate in a National Association of Insurance Commissioners’ working group on the exchanges. Even states with Democratic governors are behind pace.

“All we’re trying to do at this point is make informed decisions,” he said.

Pennsylvania has been informing itself, largely via consultants’ reports, since last year, when the state and KPMG LLP issued a preliminary study on the exchanges. The report suggested that Pennsylvania turn much of the IT work and exchange management over to the private sector because of the state government’s technology gaps. “The Affordable Care Act prescribes several new functional capabilities that virtually no state currently has in place,” the December 2011 report said.

The report’s recommendations have not been acted upon, and the draft legislation that would enable the creation of the exchanges — called the “Commonwealth Health Insurance Marketplace and Exchange Access Act” — has not been introduced, and two other pieces of legislation (House Bill No. 627 and Senate Bill No. 940) that would create exchanges haven’t been brought to a vote.

In February, the Insurance Department was awarded a $33.8 million federal grant to continue with exchange planning, but that money hasn’t resulted in much progress.

The absence of a state-operated or a joint state-federal exchange does not mean that Pennsylvanians won’t be able to shop for policies online through the exchange — the federal government will instead handle the job.

And the failure to build an exchange by 2014 does not preclude Pennsylvania from building one later, Mr. Consedine said.

While Pennsylvania and other states have either willfully opted out of the state exchanges or seem destined to miss the Nov. 16 blueprint deadline, even among those states that are forging ahead, few seem on track for an exchange that will be selling policies by 2014 (and signing up customers, clients and insurers by October 2013).

Only 16 states met a September deadline to define the benefits that will be required of plans sold in state-run exchanges, and only Maryland, California and perhaps Nevada are on pace to have fully operational exchanges within the next 15 months.