Pennsylvania is one step closer to launching its own health insurance exchange.
State legislators earlier this year approved bipartisan legislation that kick-started the process of moving off HealthCare.gov and creating its own exchange platform, with the goal of launching the new exchange for the 2021 open enrollment season. The state announced Tuesday it has signed on with GetInsured to create the platform.
GetInsured also works with Nevada, California, Idaho, Minnesota and Washington on their state-based exchanges. That experience was a key factor in the state’s decision to work with them, as there’s less than a year to go until the new exchange needs to be up and running.
“We are on a pretty tight timeline to stand this thing up,” Zachary Sherman, executive director of the Pennsylvania Health Insurance Exchange Authority, the group formed to spearhead the effort, told FierceHealthcare.
As 2020 open enrollment continues, Pennsylvanians are still using HealthCare.gov for now. But state officials estimate the savings for their transition will be significant and are able to set up a reinsurance program simultaneously due to the money saved.
Sherman said it cost Pennsylvania about $95 million to use HealthCare.gov in 2018, but it will cost about $25 million to operate the state-based exchange. In addition, state officials estimate that reinsurance will save consumers between 5% and 10% on premiums.
Pennsylvania is among several states that are working toward launching their own exchanges. A report from the Georgetown University Health Policy Institute’s Center on Health Insurance Reforms (CHIR) found that doing so is becoming a more attractive option than it was in 2014 as the costs to launch and operate the exchange are far lower.
In addition, insurers paid fee equal to 3% of premiums to operate on the federal exchange—which is money states could charge and keep for their own operations, CHIR found.
Other states eyeing their own exchanges include Maine and New Jersey, which are also planning a 2021 launch, and New Mexico, which is planning for the 2022 open enrollment window. Oregon has not yet set a launch date but is also pursuing a state-based exchange.
Eleven states and the District of Columbia already operate their own exchanges.
In addition to the substantial cost savings, Sherman said that operating a state-based exchange offers the opportunity for better marketing that’s more individualized to meet the needs of specific communities.
As HealthCare.gov is designed with a one-size-fits-all approach, a state-based exchange will free up Pennsylvania officials to launch a personal navigator program and harness data to individualize outreach.
“It's no coincidence that the states with the highest insured rate are states that both expanded Medicaid and set up state-based exchanges,” Sherman said.