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PA House Considers Plan to Authorize State Takeover of Health Insurance Marketplace

June 05, 2019

Five years after the implementation of the Affordable Care Act (ACA), Pennsylvania lawmakers are considering a plan to allow the state to take over the health insurance marketplace.

House Bill 3—introduced by co-prime sponsors House Majority Leader, Representative Bryan Cutler (R–Lancaster), and House Minority Leader, Representative Frank Dermody (D–Pittsburgh)—would authorize the Pennsylvania Department of Insurance to administer its own state-based health insurance exchange. Additionally the bill would allow Pennsylvania to apply for a waiver to create a reinsurance program using the savings realized from the state takeover of the exchange.

Pennsylvania currently pays a user fee for each individual plan purchased on the health insurance exchange. These fees cover the administration of the marketplace and totaled approximately $94 million during 2018. A state-administered plan would, according to the Wolf administration, cost approximately $30–35 million. House Bill 3 would authorize the state to apply for a federal waiver to put those savings to a reinsurance program, designed to lower premiums.

Approximately 400,000 Pennsylvanians purchase coverage through the exchange each year, and the state Department of Insurance estimates that consumers could see a 5 to 10 percent reduction in their annual premiums as a result of this plan.

Other potential benefits of a state-run exchange could include:

  • Cost savings to the commonwealth
  • More streamlined handling of consumer complaints, questions, and issues
  • Improved data access and quality
  • Customized and targeted outreach and marketing to certain communities and populations
  • Flexibility to extend enrollment periods

HAP has been supportive of this plan, and of efforts to leverage available tools to improve access to affordable, comprehensive health insurance coverage. During March, HAP President and Chief Executive Officer Andy Carter sent a letter to Pennsylvania Insurance Commissioner Jessica Altman, expressing support for the state-based health insurance exchange proposal. Additionally, during May, HAP provided testimony to the state House Insurance Committee in support of the program.

House Bill 3 has bipartisan support, as it is expected to move quickly through the state legislature. Governor Wolf has indicated that he will sign it.

For more information, contact Stephanie Watkins, HAP’s vice president, state legislative advocacy; Laura Stevens Kent, HAP’s vice president, federal legislative advocacy; or, Jolene Calla, Esq., HAP’s vice president, health care finance and insurance.

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