Pennsylvania Gov. Tom Wolf’s administration said Tuesday it has formally applied to take over the operation of Pennsylvania’s health insurance marketplace as the Democrat seeks a bulwark against the potential loss of health insurance subsidies for hundreds of thousands of state residents.
Wolf’s Department of Insurance submitted the application to the federal government on Monday, the deadline if Pennsylvania is to move to a state-based marketplace in 2016.
A U.S. Health and Human Services Department spokesman could not immediately say whether Pennsylvania was the first or only state to take such a step ahead of a U.S. Supreme Court ruling on President Barack Obama’s health care law that is due in a few weeks.
Wolf has said that he would explore this avenue for 2016 in case the court rules that subsidies cannot be continued next year in exchanges run by the federal government, like Pennsylvania’s. However, approval from the Republican-controlled Legislature would be required for any money needed to run an exchange and potentially for the legal authority, legislative officials have said.
In its application paperwork, the administration said it is working with lawmakers in 2016 budget legislation to give the marketplace the authority to generate and spend revenue.
On Monday, Wolf’s acting insurance commissioner, Teresa Miller, said there are a lot of other reasons for Pennsylvania to run its own marketplace, including the ability to regulate the insurance plans, direct consumer outreach and run the call center.
“Right now, the federal exchange that’s operating, it’s a one-size-fits-all, and it’s the same in every state,” Miller said. “I’d rather do something that’s more tailored to Pennsylvania and what we think is going to work better for our market and our consumers.”
Under its application, Pennsylvania would still have the federal government perform some duties, such as eligibility determinations and enrollment through the healthcare.gov website. That could raise the question of whether the marketplace really is run by the state, if the Supreme Court outlaws subsidies to states where the federal government runs the marketplace.
Sabrina Corlette, a senior research fellow at Georgetown University’s Center on Health Insurance Reforms, said Pennsylvania is approaching the concept pragmatically by having the federal government run the most expensive part of the operation, eligibility and enrollment.
The marketplaces are a prominent feature of the 2010 federal health care law designed to extend insurance coverage to 35 million Americans. A number of states are reconsidering the exchanges they run amid financial or operational difficulties.
Plaintiffs in the lawsuit before the Supreme Court say the Obama administration is unlawfully providing subsidies to people buying health insurance in Pennsylvania and the approximately 36 other states using healthcare.gov, the online gateway to the federally run insurance marketplace.
They say the law’s wording limits those subsidies to people purchasing policies on the 13 state-run insurance exchanges.
The court is expected to rule by late June.
Miller said she expects Pennsylvania can begin running the marketplace within weeks or months of the federal government’s approval, and certainly by the time open enrollment begins in the fall.
It is helped by the fact that the federal government has already built the computer systems, although the model being sought by Pennsylvania is slightly different than what other states have, Miller said.
“I feel confident that whatever we need to do we’re going to be in a position to do it,” Miller said. “It’s not going to be pretty, but we can do it.”
About 473,000 Pennsylvanians had enrolled in insurance plans for 2015 sold through the marketplace, according to federal government figures. Of those, about four in five — 382,000 people — qualified for a tax credit to help cover the cost of monthly premiums. The Kaiser Family Foundation estimated last November that there could be 736,000 Pennsylvanians enrolled in subsidized marketplace plans in 2016, if the court does not void the subsidies.
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