Pa. insurance exchange off table

Corbett says state-based system facing too many unknowns

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HARRISBURG -- Pennsylvania will not establish its own health-insurance exchange, Gov. Tom Corbett announced Wednesday, clearing the way for the federal government to run the benefit marketplace required under President Barack Obama's health care law.

Mr. Corbett, a Republican, had said in recent weeks that his administration had not received satisfactory answers to questions it had asked the U.S. Department of Health and Human Services about launching a state-run exchange. In a letter Wednesday to Health and Human Services Secretary Kathleen Sebelius, Mr. Corbett said too many unknowns remain for Pennsylvania to pursue a state-based exchange at this time.

"[Health care] reform is too important to be achieved through haphazard planning," Mr. Corbett said in a statement announcing the decision. "It would be irresponsible to put Pennsylvanians on the hook for an unknown amount of money to operate a system under rules that have not been fully written."

The health insurance exchanges -- online clearinghouses where people can compare to buy individual health policies -- are supposed to be open for business by January 2014 under the Affordable Care Act of 2010. While states have until Friday to notify the federal government that they wish to launch their own insurance exchange, they can decide in future years to establish an exchange. States have until Feb. 15, 2013, to decide to partner with the federal government to create an exchange.

In November 2011, Mr. Corbett had announced his commitment to establishing a state-run exchange rather than allowing the federal government to operate one. But in October 2012, Insurance Commissioner Michael Consedine told the Post-Gazette that the administration's commitment to a state-run exchange had been undermined by a failure by the Department of Health and Human Services to answer questions about how exchanges would operate.

Rosanne Placey, a spokeswoman for the Insurance Department, said Wednesday that a lack of timely information from the federal government could create uncertainty that would undermine the effectiveness of a state-based exchange.

"All things being equal, we still believe a state-based exchange would protect our local marketplace," Ms. Placey said in an email. "But at this point in time, all things are just not equal. ... Consumers, medical providers, health insurers and employers need to understand now what will happen in 2014."

The administration can revisit its decision after that point, she said.

A spokesman for the Department of Health and Human Services said the agency has issued information and guidance to states about the law.

"We have worked with all states to give them the flexibility, resources and time they need to implement the health care law," spokesman Fabien Levy said in a statement. "We will continue to do everything possible to answer particular questions and provide technical assistance to state leaders."

Highmark Inc., the Pittsburgh-based national health insurer, said in a statement that the announcement "provides needed clarity" for parties preparing to comply with the health care law. The company will offer products on the insurance exchanges, it said.

The conservative activist group Americans for Prosperity, which had lobbied against establishing a state-run exchange, applauded the decision in a statement released 20 minutes before the governor made his announcement. In an interview afterward, state director Jennifer Stefano thanked activists who urged the governor to take that position.

"We are thrilled that Gov. Corbett made this strong stand and protected the working families of Pennsylvania," she said.

House Republicans had asked the governor to reject a state-based exchange in a letter last week. The letter -- sent by Rep. Gordon Denlinger, R-Lancaster, and signed by House Majority Leader Mike Turzai and dozens of other members -- said the exchanges would drive up insurance premiums for Pennsylvania residents.

Democrats expressed disappointment. In a phone interview, Senate Minority Leader Jay Costa, D-Forest Hills, said he expects the federal government to run uniform exchanges for the various states.

"We had an opportunity to craft a health care exchange program here in Pennsylvania that would be specific and tailored to the needs of Pennsylvania residents, and we missed that opportunity," he said.

Bill Patton, a spokesman for House Democrats, noted that although Pennsylvania would not immediately run its own exchange, the Affordable Care Act remains law.

"The governor's decision does not change that in any way," he said. "A year from now, Pennsylvania consumers will have an exchange available to them. It just won't be controlled here in Pennsylvania."

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Karen Langley: klangley@post-gazette.com or 717-787-2141.


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