Arkansas, Delaware, and Pennsylvania have all received tentative approval from HHS Secretary Sylvia Mathews Burwell to set up their own state-based insurance exchanges and move their residents off the federally facilitated marketplace.
Arkansas, Delaware, and Pennsylvania have all received tentative approval from HHS Secretary Sylvia Mathews Burwell to set up their own state-based insurance exchanges and move their residents off the federally facilitated marketplace.
The announcement comes just days before a ruling is expected from the Supreme Court of the United States in the case of King v. Burwell, which will decide the fate of subsidies in the federally facilitated marketplace and millions of Americans who rely on the financial assistance to gain health insurance coverage.
A move to a state-based insurance exchange would protect 382,000 Pennsylvanians from losing federal subsidies, which makes it the state with the fifth most people relying on this financial assistance behind Florida (1,324,516), Texas (832,334), North Carolina (458,738), and Georgia (412,385).
The letter Pennsylvania Governor Tom Wolf sent to HHS only declared the state’s intent to implement a state-based marketplace in the event the Supreme Court rules people on the federal marketplace are not eligible for subsidies.
“These actions do not mean that Pennsylvania must set up a state-based marketplace,” he said in a statement. “However, the responsible thing to do is set up a plan to protect hundreds of thousands of people and I look forward to working with members of the legislature to advance this plan if necessary.”
The Pennsylvania and Delaware approvals are to create state-based exchanges for both the individual and small business coverage in 2016. Arkansas can create a state-based small business marketplace in 2016 and an individual marketplace in 2017.
All 3 approvals are contingent upon the following conditions:
1. Timely demonstration of the ability to perform required Marketplace activities in line with the attestations the states have made in their Marketplace Blueprint Application submissions
2. Compliance with federal regulations and completion of expected progress benchmarks
If the Supreme Court rules in favor of the plaintiffs and all 3 states set up their exchanges as expected, the number of people at risk of losing tax credits will be reduced by approximately 416,000 individuals, according to data from the Kaiser Family Foundation. However, these are the only states that met the regulatory notice requirement for switching from the federally facilitated marketplace to a state-based one, pointed out Timothy S. Jost, professor of law at the Washington and Lee University School of Law.
Roughly 6 million individuals are still at risk of losing their financial assistance and subsequently their health insurance if they cannot afford coverage without the help of subsidies, Kaiser estimates.
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