Insurance exchange designs criticized
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A health advocacy group is questioning Pennsylvania's early designs for its public health insurance exchange, the statewide insurance policy clearinghouse mandated as part of the federal government's 2010 health care overhaul.
States are supposed to have the online exchanges -- where multiple insurance carriers provide a variety of policies and consumers can compare the products -- up and running by 2014. In November, Republican Gov. Tom Corbett announced his "commitment" to building a state-run insurance exchange rather than let the federal government operate Pennsylvania's exchange, despite his opposition to the personal-mandate provision of the health care law.
But in a conference call Friday morning, the Pennsylvania Health Access Network said one of Pennsylvania's rough drafts of the legislation governing the exchange, which was circulated this week during a series of meetings, allows for the existence of multiple exchanges operated by private companies.
The exchanges would have to be certified by the state Insurance Department and would operate under the new Office of the Commonwealth Health Insurance Marketplace, according to the draft legislation.
"The best-case scenario would be [one] state-based exchange," said Antoinette Kraus, project director of Pennsylvania Health Access Network. A single portal, she said, would make it easier for consumers to compare, contrast and ultimately buy the right policy. Certifying multiple private companies to operate the exchange, or exchanges, would "line the pockets of big business," Ms. Kraus said.
Pennsylvania has been studying the creation of the exchange with consultants, and last year the state and KPMG LLP issued the preliminary results of those studies. One reason for looking to the private sector, according to the state, is because of the state's technology "gaps."
"The Affordable Care Act prescribes several new functional capabilities that virtually no state currently has in place," the December project abstract said.
Insurance department spokeswoman Melissa Fox said Friday that while representatives from the department had met with legislators and other stakeholders this week to hash out some ideas, "Nothing is set in stone yet. ... There are a couple of concepts that are being floated."
Whichever concept emerges from these talks will have to be approved by the U.S. Department of Health and Human Services, said HHS Regional Director Joanne Grossi, who was also part of Friday's press call.
The draft legislation now being circulated, called the "Commonwealth Health Insurance Marketplace and Exchange Access Act," suggests there will be at least two classes of exchanges -- small-employer exchanges and individual ones.
Sharon Ward, executive director of the Pennsylvania Budget and Policy Center, said the use of multiple exchanges, even if they are organized under a single portal, could lead to confusion. "It takes a very simple idea and makes it needlessly complicated," she said. The federal government "is pretty clear about having a single exchange."
The privately operated exchanges, according to the draft, would aim to "maximize the use of private sector resources with demonstrable expertise." The draft has not yet been submitted to the Legislature for sponsorship as a bill.
First Published February 4, 2012 12:00 am