Health care reform a certainty now, but details uncertain

Even after President Obama's reelection eliminated the possibility of repeal of the Affordable Care Act, the state health insurance exchanges at its core remain embedded in uncertainty.

The administration on Friday extended a deadline from this coming Friday to Dec. 14 for states to submit a blueprint for how they will set up an insurance exchange, as opposed to accepting one designed by the U.S. Department of Health and Human Services. States still must notify regulators by Friday of their intention to set up their own exchanges.

It's not clear how much difference the extension will make to officials expecting thousands of pages of regulations to come out in the next several weeks.

"We're currently evaluating the HHS extension letter," Pennsylvania Insurance Commissioner Michael Consedine said. "The new extended deadlines appear to indicate flexibility in the overall timeline, which we see as a positive development."

Many state officials, including Consedine, have complained that they did not have enough information from the federal government to decide by this Friday.

The online health-insurance exchanges are supposed to simplify health-insurance markets for individuals and small businesses and to make markets more competitive by allowing consumers to more easily compare insurance plans. Open enrollment for exchange plans is scheduled to start Oct. 1, 2013, with coverage effective Jan. 1, 2014.

About half of the 30 million uninsured expected to gain coverage under the health reform law will obtain private insurance through the exchanges, most with government help. Others, mainly low-income adults without children at home, will gain insurance through an expansion of Medicaid, though it's not clear how that will play out, given the Supreme Court's decision that states may opt out of that provision.

The Associated Press reported Thursday that 17 states and the District of Columbia are on track to set up their own exchanges. Ten have decided not to do so.

It is not clear what will happen in New Jersey. Gov. Christie's office had no comment.

Neil Eicher, director of government relations and policy at the New Jersey Hospital Association, said Christie has three options: He could sign the legislation that is on his desk, establishing a state exchange. By executive order he could establish a hybrid state-federal exchange. Or he could allow the feds to operate an exchange, at least to start.

"It's clear that they've been preparing and looking at different options. We just don't know which one he is going to choose," Eicher said.

The hospital association favors the current legislation - the plan already residing on the governor's desk. "It's a robust exchange that really tries to insure as many people as possible. We're supportive of that," Eicher said.

Hospitals in Pennsylvania also prefer a state-run exchange. "Different states have different insurance markets. It's those types of things the state has expertise in that the federal government doesn't have," said Curt Schroder, regional executive for the Delaware Valley Healthcare Council.

Consedine said an issue in Pennsylvania is that "our insurance companies aren't operating in all parts of the state." It's not clear to Consedine, who sent a list of 26 questions to Washington in August and has yet to receive a response, how a federal exchange will handle that.

"I'm not sure it's going to be nimble enough," he said of the federal exchange.

Daniel E. Polsky, executive director of the Leonard Davis Institute of Health Economics at the University of Pennsylvania, said he was optimistic about the exchange concept in the long run.

"After some fits and starts, it's going to be doing the job it was designed to do," he said.

The second big decision for states - whether to expand Medicaid to people with incomes up to 133 percent of the poverty level, or up to $14,856 for an individual - does not have a deadline. Polsky said he expected widespread acceptance of that expansion.

"Even states that don't value the actual citizens that would benefit from the expansion of Medicaid might value what hospital executives have to say," Polsky said.

In Pennsylvania, one of those voices likely belongs to Larry Kaiser, chief executive of Temple University Health System, which provides a high level of uncompensated care for North Philadelphia residents. "I think the state really needs to participate in the Medicaid expansion. To leave federal money on the table would be shortsighted," Kaiser said.

The Affordable Care Act calls for $2.5 billion in Medicare reductions in southeastern Pennsylvania. "With those reductions in Medicare, it cries out for the need to have a greater level of coverage in insurance, both through these exchanges and the expansion of Medicaid," Schroder said.

Gov. Corbett's office said it is seeking more details from the federal government on the expansion, but has not gotten answers. "We are taking the time to ensure we make an informed decision on Medicaid expansion," spokeswoman Christine Cronkright said.