Health care plan B readied
Wolf moves to protect 382,000 in Pa. if ACA provision gutted
Just in case the U.S. Supreme Court guts a key financing provision built into the Affordable Care Act’s federal health insurance marketplace, Gov. Tom Wolf is setting up a “contingency plan” to take control of Pennsylvania’s piece of the exchange.
The move, the Democratic governor’s office said Friday, would protect the 382,000 Pennsylvanians who purchased individual plans via the federal marketplace and who receive taxpayer subsidies in order to help them pay their monthly premiums.
In March, the Supreme Court heard arguments in a case known as King v. Burwell. The plaintiffs in that lawsuit claim that the strict language of the 2010 ACA does not permit tax subsidies — which reduce the cost of individual health plans — to be disbursed to customers who buy policies through the federal exchange.
That’s because buried deep in the 900-page act is a passage that says subsidies must be distributed “through an Exchange established by the State” — but the law makes no mention of exchanges established by the federal government. And while several states built and operate their own exchanges, there are more than two dozen states that declined to build their own marketplace, deferring to the federal government’s HealthCare.gov version.
Pennsylvania is one of those states that deferred. And if the Supreme Court ruling — expected by the end of June — effectively gets rid of the subsidies, Mr. Wolf says Pennsylvania needs a backup plan.
“I have written to the federal government outlining a contingency plan to set up a state-based marketplace to ensure no one loses their health coverage,” Mr. Wolf said in a statement. “My letter does not mean that Pennsylvania must set up a state-based marketplace.”
Rather, the state would “assume responsibility for running the marketplace, but will leverage the [federal] marketplace’s existing infrastructure to provide certain services,” according to Mr. Wolf’s letter to the U.S. Department of Health and Human Services.
“The enrollment and eligibility functions of the marketplace would still be handled by the federal government,” said Ronald Ruman, spokesman for the state Insurance Department. “People enrolling in plans would come to a Pennsylvania homepage, but the actual enrollment would still be done through HealthCare.gov.”
But Pennsylvania would handle other aspects of the marketplace, he said — the state would vet the plans, run its own consumer call center, and levy and collect a fee on insurers to fund the state’s operations. (The federal government assesses insurers 3.5 percent on each policy’s premium.)
June 1 is the deadline to submit an application to operate a statebased marketplace, according to the governor’s office, but Friday’s announcement does not necessarily mean that Pennsylvania has to pull the trigger on the application, or the marketplace.
Even if the Supreme Court decision leaves the subsidies intact, eliminating the immediate need for a backup plan, “the Wolf administration is planning for an eventual state-based marketplace,” Mr. Ruman said.