HARRISBURG (TNS) — Pa. House Democrats moved forward with a bill that would facilitate a key part of Gov. Josh Shapiro’s budget plan — and potentially lower healthcare costs for hundreds of thousands of Pennsylvanians.
The House Insurance Committee, on a party-line vote, approved a measure that would ensure the state’s health reinsurance program continues; the bill would also establish an additional insurance subsidy for low-income Pennsylvanians, if and when funding is available.
Those initiatives are part of Pennie, the state’s five-year-old health insurance marketplace, where Pennsylvanians can shop for federally-subsidized coverage under the Affordable Care Act. The state was previously using the federally-run marketplace, but moved to an in-house system with Act 42 of 2019.
Even with the federal “Obamacare” subsidies, many of the 435,000 Pennsylvanians who get their health insurance through Pennie are looking at limited coverage with high deductibles and pricey premiums, particularly if they fall just over the cutoff line for federal assistance.
“Many Pennsylvanians technically have coverage through Pennie, but that coverage has a deductible in the thousands of dollars, meaning that person basically can’t use their insurance,” said Rep. Patty Kim, D-Dauphin County, the bill’s sponsor and the chair of the insurance committee.
Over the past decade, the average deductible for the least-expensive ACA market plans has gone from just over $5,000 out-of-pocket to over $7,000, according to data from the Kaiser Family Foundation. Kim shared a story Monday of one Pennsylvanian who ended up with a $9,000 deducible.
The bill under consideration will help “more people get insurance, and more people get better insurance,” Kim said.
Act 42 of 2019 includes a provision for reinsurance — essentially insurance for health insurers themselves, protecting them against certain high-cost patient claims in exchange for reducing the premiums and deductibles on their plans.
This reinsurance mechanism in Pennie is currently funded by a 3% user fee and would continue under Kim’s bill, which requires the state insurance commission to re-apply for a federal reinsurance waiver.
The bill would also authorize Pennie to create an “affordability assistance program” to further reduce health insurance costs depending on a patient’s income or other qualifiers. Several other states are also in the process of creating their own subsidy boosts or cost-sharing programs to make ACA coverage more affordable, according to KFF.
The user fees could fund the new affordability program, but only if this does not impact the existing reinsurance funding, according to Kim’s bill, which allows for alternative funding sources for the programs.
What this new funding would be and where it would come from are expected to be debated as part of the budget process, an uncertainty that was the impetus for the Republicans who voted no on Monday.
“I don’t think it’s appropriate to go back home and talk about unrealistic expectations” with constituents given that the bill has no concrete funding mechanism, said Rep. Tina Pickett, R-Bradford County, the ranking Republican on the committee.
“I made the decision to do this now because we need to start this process and we need to get the ball rolling,” Kim responded, particularly given the Pennie board’s meeting dates and the time needed to set the programs up.
Shapiro’s budget proposal earlier this year requested $50 million for Pennie cost-reduction initiatives, which will be taken from a surplus that exists in the state’s workers’ compensation insurance guaranty fund.
However, Kim said Monday that House Democrats decided not to go forward with that specific funding mechanism, as budget negotiations continue with Shapiro and the Republican-controlled Senate — where many of the governor’s expanded social spending ideas have been met with a cool reception.
Pennsylvania’s fiscal year ends June 30, leaving lawmakers another eight weeks to hammer out a budget deal.
