State-based health insurance exchange bill headed for House vote

HARRISBURG, June 6 – A bill that would create a state-based health insurance exchange for Affordable Care Act individual market plans was reported unanimously from the House Insurance Committee this week, according to co-sponsor and committee member state Rep. Marty Flynn.

“This bipartisan legislation would help the 400,000 Pennsylvanians who get insurance though the federal insurance exchange and it would cost the state less money than we are currently sending to the federal government to operate a similar program,” said Flynn, D-Lackawanna.

“Providing affordable access to quality health coverage, while also saving taxpayer money and stabilizing premiums is important to Democrats and Republicans and we showed that with this week’s unanimous vote. I believe once our other colleagues recognize the benefits of a state-based plan, it will pass the House overwhelmingly. Based on the experience in other states that are operating their own plans, I am encouraged that it will help consumers here as well.”

More than a dozen states now operate their own exchanges. The bill also would allow Pennsylvania to apply for a waiver to create a reinsurance program designed to drive down premium increases in the individual market and allow the state-based exchange to better serve Pennsylvanians.

The federal government is expected to fund 75% of reinsurance program costs. The remaining 25% would be paid by the authority operating the state-based exchange program. Their contribution would be generated by the savings realized by converting administration of the exchange from the federal government to the state. 

Reinsurance allows insurers to price their products lower for everyone by limiting their exposure to very high, unpredictable medical expenses. Those expenses are paid out of the reinsurance program once they exceed a certain threshold.

The full state House of Representatives is expected to consider the measure (H.B. 3) during next week’s legislative session.