Nov 17, 2012 4 min read

HARRISBURG – Gov. Tom Corbett’s administration remained noncommittal after it received a one-month extension to tell the federal government whether Pennsylvania will be setting up a health insurance market under President Barack Obama’s health care law.

U.S. Health and Human Services Secretary Kathleen Sebelius told Republican governors Thursday evening the administration was responding to their request for more time by delaying a Friday deadline to declare their intentions until Dec. 14. States can still opt to have theirs run by the federal government or join in a partnership with Washington.

Corbett administration officials would not say Friday which direction they plan to take. But they say they have put off development of the online exchange by 2014 because too many questions about its cost and other operational details remain unanswered.

“We are still looking at it and you’ve heard me say this before, I’m looking at the cost,” Corbett said earlier this month. “I’m looking at the cost to Pennsylvania taxpayers and whether we can afford it. I have some ideas of where we’re going, but I’m not ready to announce it right now.”

There is no penalty for launching a state-run exchange after 2014, Pennsylvania officials also say.

Some states, including New York and California, will run their own exchange. Texas and Virginia are among those that rejected it, meaning the federal government will run the exchange.

Many states put off a decision until after the Nov. 6 election, because the Republican presidential candidate, Mitt Romney, had said he would move to repeal the 2010 law known as the Affordable Care Act. With Obama’s victory, Republicans acknowledged he law would go forward.

In her Thursday letter to the Republican Governors Association, of which Corbett is a member, Sebelius said her agency has given information and guidance to states regarding the law, and that more will be forthcoming.

Some Democratic lawmakers, insurers and hospitals want Corbett to set up a state-run system. The state’s two largest health insurers, Pittsburgh-based Highmark and Philadelphia-based Independence Blue Cross, both prefer a state-run market, or at least as much state involvement as possible.

But given the tightening time frame to get one running by 2014, Highmark spokesman Michael Weinstein said it is more important the market provide a broad choice of plans with all insurers regulated equally by the state.

“Those are critical for whatever structure emerges here in Pennsylvania,” Weinstein said.

Geisinger Health System, which operates across central and northeastern Pennsylvania, prefers a state-run exchange because it would be better-tailored to the state and less bureaucratic.

“However, at this late date we have concerns as to whether there is enough time for such an exchange to happen,” Frank Trembulak, Geisinger’s chief operating officer, said in a statement. “At this point, we are awaiting the commonwealth’s decision.”

Sam Marshall, president of the Insurance Federation of Pennsylvania, which represents for-profit insurers, said he doesn’t believe it is practical to expect the state to pass enabling legislation and begin accepting applications Oct. 1, 2013.

Regardless, “it is important to get it right from the outset, more than to get it done fast,” Marshall said. “Because if it is to work, it will need consumer confidence from the outset.”

The Washington, D.C.-based group Americans for Prosperity, which was founded by billionaire energy executives Charles and David Koch and spent tens of millions of dollars trying to defeat Obama in the election, is among those urging Corbett and other governors to reject it.

The new insurance exchanges will allow households and small businesses to buy a private health plan, and many will get help from the government to pay their premiums. Under the law, states that can’t or won’t set up exchanges will have theirs run by the federal government.

States considering a partnership have until mid-February to make a decision. The partnership option allows states to handle consumer relations and oversight of health plans, while the federal government does the bulk of the work, including handling enrollment and figuring out how much taxpayer-funded help consumers may be entitled to.