Pennsylvania Governor, Tom Corbett, announced on December 12th that the Commonwealth will not be establishing its own Health Insurance Exchange. To most of us, this came as no surprise. Here’s the link to the Governor’s statement along with his letter to Secretary Sebelius. Within his letter, the Governor states his financial concerns of expanding Medicaid eligibility within the state. He cites to a $4 billion cost to the state over an eight year period. At this time the Governor has not decided whether Pennsylvania will expand Medicaid eligibility or not.
title=”Regulations posted today on Federal Register”>Regulations posted today on Federal Register
Today regulations have been posted by the Health and Human Services Department providing guidance on the Essential Health Benefits, Health Insurance Exchange and other provisions of the the Affordable Care Act.
On Wednesday, October 17, Pennsylvania Health Insurance Commissioner, Michael Consedine stated that the Commonwealth will not be meeting its November 16th deadline to submit an Exchange Blueprint to the Health and Human Services (HHS) Department. Because of this, the State will not be able to establish its own state-based exchange but must instead either default to a Federally Facilitated Exchange (FFE) or partner with the federal government to establish a Partnership FFE.
Previously, I provided information about the progress of Pennsylvania’s Health Insurance Exchange (HIX) implementation. Today I received an email from Pennsylvania Insurance Department (PID) Commissioner, Michael Consedine, providing an update on the Commonwealth’s developments with the Essential Health Benefits (EHB) package and other health reform issues.
In his email, sent out through PAHealthOptions.com, the Insurance Commissioner provided links to three documents that should inform the reader of the “most recent activities of the department.” The links included: 1. A report conducted by Deloitte on the EHB in Pennsylvania; 2. A letter to the HHS Secretary regarding the EHB; and 3. A letter to the HHS Secretary requesting more information about HIX implementation. Following the links Commissioner Consedine assured the reader that, “We continue to be committed to pursuing health care reform solutions that work best for Pennsylvanians – but we are similarly committed to making sound, informed decisions – not just fast ones.”
The Deloitte study analyzed the Commonwealth’s choices of existing plans within the state to operate as the EHB as provided by HHS. These include: 1. The largest plan by enrollment in any of the three largest small group insurance products in the State’s small group market; 2. One of the three largest State employee health benefit plans by enrollment; 3. One of the three largest federal employee insurer options; or 4. The largest HMO plan offered in the State’s commercial market.
Deloitte found that there was only a one percent difference between the total value or cost between the highest and lowest options; however coverage differences did exist among the plans, most notably for dental and specialized services including behavioral health. The study also found that all ten of the existing plans analyzed would need to be supplemented in order to meet requirements under the Affordable Care Act (ACA).
So, the question is: Which health plan will Pennsylvania choose as its Essential Health Benefits package? Like the letter to HHS about the Health Insurance Exchange, Commissioner Consedine, provides a similar answer. The Commissioner states, “Given what we believe to be the clear statutory obligation on HHS to define EHBs and the lack of any rulemaking that would allow Pennsylvania to make an informed and consequential decision by September 30th, we are simply providing the study conducted by the Commonwealth at this time.” Commissioner Consedine also stated in his letter that he will be “directing interested parties to submit their comments and recommendations to you [HHS] for your consideration. . . ..”
In an ironic attempt to subvert a “one-sized fits all” Washington D.C. policy on the State of Pennsylvania, the Insurance Department has chosen to defer to Washington D.C. to craft the EHB package and will most likely default to a Federally-Facilitated Exchange (FFE) or a Partnership FFE.
Prior to the U.S. Supreme Court’s announcement of its decision to uphold most provisions of the Affordable Care Act (ACA) on June 28th, many states, especially those who were plaintiffs in the landmark case, failed to make substantial progress in designing and implementing health insurance exchanges (HIX). Pennsylvania, being one of the plaintiff states, has not revealed much regarding its plan for a state HIX. A recent letter from Pennsylvania’s Insurance Commissioner, Michael Consedine, to Health and Human Services (HHS) Secretary Sebelius provides us with some insight. Unfortunately, the letter validates suspicions that the Commonwealth has done little in terms of preparing for HIX and other ACA provisions that are set to go into effect in 2014.
The letter challenges the Secretary’s lack of guidance to the States regarding implementation of the ACA. Commissioner Consedine cites the changes associated with the ACA as being “fundamental and potentially disruptive to Pennsylvania’s marketplace” and that “we must be mindful of the consequences, both fiscal and policy. . . .” He later cites the fact that according to the ACA, State HIX must be self-financing by 2015, a major concern. However, according to Healthcare.gov, Pennsylvania has received $1 million in planning grants and $33.8 million in Exchange Establishment grants. So what has the Commonwealth done with the money? Well, nothing with the Establishment grants. Commissioner Consedine concluded his letter stating that until more information is given by HHS, Pennsylvania will withhold expending any of the Establishment funds.
States are required to have their HIX plans ready for implementation by January 1, 2013. With many states waiting on the election, it is unlikely that many states will meet this requirement. Alternatives for states that have not established their own state-run HIX is to have the Federal government operate an exchange in the state or to enter into a partnership with the Federal government. Commissioner Consedine listed 26 questions for Secretary Sebilius to answer in his letter to her. Many of the questions centered on getting details about the Federally-Facilitated Exchange (FFE) or a Partnership FFE. With deadlines looming and little progress made this appears to be the direction Pennsylvania is headed.