Pennsylvania has work to do for health insurance law [The Patriot-News, Harrisburg, Pa.]

July 02--Pennsylvania is building a health insurance exchange but making no guarantee it will be ready by the Jan. 1, 2014, deadline.

When asked if the state will meet the deadline, state Insurance Department spokeswoman Rosanne Placey said Friday, "Honestly, I don't know the answer to that."

Many people have cited "clarity" resulting from Thursday's ruling by the U.S. Supreme Court to uphold the Affordable Care Act. The law is intended to cover most of the 50 million Americans who lack health insurance beginning in 2014.

A key component is the exchanges, which will enable individuals and small businesses to compare and shop for coverage.

But Placey said the court ruling clouds the issue in some ways, and Pennsylvania officials must sort through the ramifications and figure out the best path for the Keystone State.

"Most of the states are in the same boat. Everybody will be scrambling in the next year to get this up and running, as will the federal government," Placey said. "We're not ready to commit to the next steps."

Federal officials on Friday expressed confidence that the deadlines can be met. They announced new grants toward creating exchanges, pledged "flexibility" regarding how states are allowed to go about it and said federal officials soon will begin traveling to states to meet with state officials.

They further said President Barack Obama is "open to good ideas" for improving the Affordable Care Act.

'Pick up the pace'

Gov. Tom Corbett, when he was Pennsylvania's attorney general, was among a group of attorneys general who filed a lawsuit opposing the Affordable Care Act.

The suit eventually included 26 states and was one of two that resulted in Thursday's ruling by the Supreme Court.

Corbett said he is "disappointed" by the ruling and "will work hard to limit the law's negative impact in Pennsylvania."

He contends the act will lead to increased health care costs and hurt businesses and job creation.

But Corbett has long said he will abide by the federal law, and Pennsylvania began taking some of the required steps well before Thursday's ruling.

The steps include public hearings last year that led to the decision that Pennsylvania will create its own exchange, rather than follow the option of a federally created exchange.

However, Kim Bathgate, a marketing director for the state Insurance Department, said on Friday that collaborating with the federal government on an exchange "may be an option as a possible interim step."

Pennsylvania is among the many states that have applied for and obtained early grants toward creating exchanges, including a $34 million grant that arrived in February.

Still, Sharon Ward, director of the Pennsylvania Budget and Policy Center, said some other states are well ahead of Pennsylvania in preparing for the Affordable Care Act. The law calls for expanding Medicaid to cover people earning up to 133 percent of the federal poverty level, or about $29,000 for a family of four.

"Pennsylvania has moved forward with the implementation of the exchanges very tentatively, and we really need to pick up the pace," she said. "There's wide agreement among a lot of stakeholders that an exchange is a good idea, and the barrier to that has been removed."

Medicaid expansion

Another role of the exchanges will be to connect people with tax credits to help them afford coverage and to direct people to Medicaid, which will be expanded to cover some of the uninsured.

Pennsylvania has about 1.4 million people with no health insurance.

The lawsuits that led to Thursday's ruling also challenged the expansion of Medicaid, the federal program to provide health care for the poor.

While the court ruled the expansion is legal, it ruled against the proposed penalty of withholding Medicaid funds from states that refuse to carry it out.

The federal government will fund the expansion for the first few years, then scale back its share to 90 percent.

The consequences of the loss of the federal penalty are being weighed.

But Ward said it would be foolish for Pennsylvania to turn down the money, which she believes will result in coverage for about 683,000 Pennsylvania residents by 2019.

In addition to allowing those people to obtain health care, the expansion would benefit hospitals, which end up caring for uninsured patients and not getting paid.

One component of the Affordable Care Act is well-established in Pennsylvania -- a high-risk pool for people who have chronic medical conditions and can't find an insurance company willing to cover them.

The pool covers about 5,600 people who pay $283 per month for the coverage. The federally funded pool, which the Insurance Department hired Highmark Inc. to run, has administrative costs of 10 percent, with the rest of the funds going toward medical care.

Placey said Pennsylvania's pool has one of the highest enrollments and one of the lowest premiums in the country.

Yet she noted that the pool has a high attrition rate, which raises questions about the choices people make even when presented with an affordable and generous health insurance option.

It's possible some entered the pool to obtain coverage for a procedure and then quickly left or decided they were unwilling to pay for even heavily subsidized coverage.

However, she said the Insurance Department doesn't know how many of the people who left the pool did so for reasons such as death or becoming old enough to receive Medicare.

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