Time running out for Pennsylvania health care exchange decision

Gov. Tom Corbett (R-Pa.) has only two weeks left to decide if he will set up a health care exchange in Pennsylvania under the Affordable Care Act.

States still debating whether to set up their own health-exchange market or let the federal government do it received a one-month extension on Nov. 14 with a Dec. 14 deadline. A health care exchange is an organized, competitive market for health insurance that offers choices of plans and establishes common rules about insurance prices.

This aspect of the ACA, ruled constitutional this summer and locked in by President Barack Obama’s re-election, stipulates that the federal government will fund exchange-related costs until 2015. After that, the state must fund the exchanges, which could cost Pennsylvania up to $75 to $100 million a year, according to health care management professor Scott Harrington.

“The question is not whether PA will have an exchange but who will run it,” Health Care Management professor Robert Town said in an email. “States may need as much time as possible to understand the logistics of putting together their own exchange before deciding whether to do it. Thus, it does not surprise me that Corbett is [taking] all the time … allotted.”

Penn Law professor Tom Baker doubted that there was enough time left for the state to be prepared to set up an exchange before the December deadline.

Another option on the table for Pennsylvania is a hybrid plan, explained Town, in which the state and federal governments each run some functions.

“I would not be surprised to see that happen here,” he said.

If Pennsylvania did have its own health care exchange, it would benefit from having a more state-specific plan.

According to Harrington, while the state would have the control to tailor the program, it would still have to comply with U.S. Department of Health and Human Services regulations which are relatively inflexible. Many of the regulation details are yet to be finalized.

However, setting up the exchange would add more bureaucracy to the state, said health care management professor Amanda Starc.

“Pennsylvania can always choose later to set up its own exchange, but it’s not clear that the federal government would pay for the startup costs,” Baker said.

Political motives may also be a factor in Corbett’s delayed decision.

“Republican governors, in general, were hesitant to publicly endorse Obamacare by setting up their own health-insurance exchange and were hoping that the outcome of the election would mean that they would not have to set one up,” Town said.

In 2010, Corbett was one of 13 state attorney generals to sue the federal government to challenge the ACA. Several states with Republican governors — such as Wisconsin under Gov. Scott Walker — have rejected the exchange program entirely.

Political science professor Rogers Smith said Corbett is likely acting out of both “genuine concern” over “how to set up a health care exchange while minimizing financial risk to the state” but also wants to “dramatize how difficult he thinks it is” for states to comply with the ACA.

Corbett’s ultimate goals, however, are less clear. Smith speculated that Corbett and other governors could be holding out in the hopes that the Obama administration would “sweeten the deal” by offering additional incentives. He also said Corbett might “just want to leave it up to the federal government … and the extension allows him to claim he’s explored every way for the state to do it and found them wanting.”

While the strategy could appeal to Corbett’s base, Smith said, it could also anger a public looking for leaders in both parties to cooperate.

“The Obama administration is not likely to do Pennsylvania any favors in the near future—except for Philadelphia,” he added.

Please note All comments are eligible for publication in The Daily Pennsylvanian.