Pa. faces federal pact as care exchange deadline may force partnership with Washington
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Pennsylvania officials, who have made little progress in setting up a health insurance exchange as mandated under Patient Protection and Affordable Care Act, may be forced to pursue a federal-state partnership if they are to meet the January 2014 deadline.
That would signal a change from repeated statements by state officials and others that Pennsylvania wanted its own exchange rather than have the federal government set one up for them, and would instead take a "middle ground" approach of shared responsibility -- at least temporarily.
Six months ago, there seemed little appetite for seeking federal participation. In December, Republican Gov. Tom Corbett petitioned Health and Human Services Secretary Kathleen Sebelius for startup grant money, writing that, "Pennsylvania has determined that continuing to examine and pursue a state-based, health insurance exchange is in the best interest of Pennsylvanians."
A report by consultants at KPMG in November summarized the sentiments expressed in various public forums: "A large majority of providers, producers, insurers and community representatives alike expressed their desire for Pennsylvania to create its own exchange."
While there's been no official word yet on what the state will do, the pressure is on following the Supreme Court's recent decision to uphold the health care reform legislation. Nationally, many had expected that would be rejected.
Rosanne Placey, spokeswoman for the state Insurance Department, said Friday that she could not confirm that the department is looking at a federally facilitated health insurance exchange. "We continue to evaluate the impact of the Supreme Court decision on the commonwealth, and no formal decision has been made at this time."
But there may not be time left for Pennsylvania to go it alone.
Establishing an exchange as a marketplace for people to compare the coverage and costs of different health plans would require enabling legislation by state lawmakers when they reconvene in the fall or an executive order by the governor.
By mid-November, states are supposed to provide a detailed blueprint to Ms. Sebelius showing they will have an operational exchange by January 2014.
"We should have been prepared, and now we're going to have to hurry up," said state Rep. Tony DeLuca, D-Penn Hills, the ranking Democrat on the House Insurance Committee who sponsored a bill to authorize an exchange in early 2011.
Antoinette Kraus, project director for the Harrisburg-based health care advocacy group Pennsylvania Health Access Network, put it more bluntly: "Pennsylvania is pretty much nowhere down the road on implementation."
A key reason for the lack of progress is that state officials, like everyone else, were waiting for the Supreme Court to rule on the constitutionality of the Affordable Care Act.
In particular, the Supreme Court's oral arguments in March -- during which some justices strongly questioned many of the Obama administration's arguments for upholding the law -- "created a great deal of uncertainty about the Affordable Care Act, and that really contributed to a slowdown," said Sharon Ward, director of the Pennsylvania Budget and Policy Center, a left-leaning Harrisburg think tank.
The court upheld the health care reform law's individual mandate 10 days ago on a 5-4 vote -- just as Pennsylvania legislators were putting the finishing touches on the state budget, then adjourning for the summer.
Come this fall, "We may have four to five weeks to try to put this together, and I hate to see us rush into this," Mr. DeLuca said. "There was no reason not to have something ready regardless of how this Supreme Court decision went down."
Sen. Michael J. Stack, D-Philadelphia, who sponsored enabling legislation on the Senate side last year, credited Mr. Corbett for "taking responsible steps" toward getting an exchange, pointing to the proposal to establish regional exchanges rather than a single statewide exchange. "At least the administration put up some ideas and some framework."
But insurers didn't like the idea of multiple exchanges, he said, and others worried that it would create inconsistent rate schedules and make shopping for insurance complicated for consumers. So while there is now general, if not unanimous, agreement for moving ahead, the details are only beginning to take shape.
"We're not going to have many legislative days to get ready," said Mr. Stack. "The administration should be in a sprint right now, and they've been casually sauntering."
At least one key Republican favors a more cautious approach.
Joe Pittman, chief of staff for Sen. Donald C. White, R-Indiana, chairman of the Senate banking and insurance committee, said they had not heard discussion of a state partnership with HHS. Mr. White, he added, "is not yet convinced that the state should move forward with implementing the exchange."
While he understands that if the state does not have time to create an exchange, the federal government will do it for them, the senator has not yet decided which alternative he favors, Mr. Pittman said. "He's not going to rush down the path of setting up an exchange until he's convinced he knows all of the ramifications."
Creating a health insurance exchange is not a matter of simply taking a yes-no vote.
Legislators have to consider what the infrastructure should look like and settle on issues such as how eligibility will be determined and how enrollment will be handled. Even putting the information technology pieces together could be a major task.
Some states, including West Virginia, had moved ahead with plans for an exchange prior to the Supreme Court decision, while others have lagged.
The website www.statereforum.org, which tracks states' progress in implementing health care reform, lists Pennsylvania and Ohio among the bottom third nationally, in a category it labels "not active." Pennsylvania still has not spent any of the $33.8 million grant awarded by the U.S. Department of Health and Human Services in February to help establish an exchange, confirmed Ms. Placey of the state insurance department.
While a partnership with HHS would mark a change in strategy, some say it does not necessarily mean a major federal presence or imprint on the final form the exchange will take.
"It's going to be more of a support and coordinating role," Mr. Stack said.
"The Department of Health and Human Services has bent over backwards to allow states flexibility to develop things in ways that meet with state goals," said Ms. Ward, at the Pennsylvania Budget and Policy Center. "It is still the Pennsylvania exchange because it won't look like anyone else's exchange."
Rather than wresting jurisdiction from Pennsylvania, she sees HHS temporarily handling discrete functions, such as determining eligibility or setting up the Web portal, until the state is ready to take full control.
"One guy is making the sauce and the other guy is making the dough," she said, "and then they come together and it's pizza."
First Published July 8, 2012 12:00 am