The Pennsylvania Insurance Marketplace

In our last blog, we discussed the state-run exchange operating in Maryland.  In contrast, Pennsylvania, home to some 1.3 million uninsured, is letting the federal government run the exchange.    Back in 2011, it seemed as though PA would be taking the same approach as Maryland by developing its own insurance exchange system.  In 2012, they even went as far as developing a  conceptual draft for a state-run exchange and went even further by putting forth a request for quotations to implement such an exchange.   However, just before the decision to run a state-based exchange was to be filed with the federal government, Gov. Tom Corbett announced that it would be irresponsible to “put Pennsylvanians on the hook for an unknown amount of money to operate a system under rules that have not been fully written.”   As such, PA residents in need of health insurance must use the federal marketplace.    

Uninsured Pennsylvania residents are able to purchase health insurance through Insurance Market place at www.healthcare.gov.   Navigating through the federal marketplace, a family of 4 making $50,000 a year and living in Philadelphia will be able to purchase a Silver level plan for $9,216 annually.   With the appropriate tax credits, the same Silver plan premium becomes $3,365, for a tax-credit savings of $5,851.  The same family could choose a lower-level Bronze plan for only $1,446 annually, still taking into account the $5K+ tax credit.  Taking this lower level plan might save money in premiums, but is likely to result in higher out-of-pocket costs.   For a calculator to help figure out the costs without registering through the Market Place, see here.

 No matter, by January 1^st, 2014, all citizens will be required to maintain health coverage in some fashion – if not a penalty will be levied.  For 2014, the penalty will be 1% of income to a maximum of $95 and $47.50 per uninsured adult and child, respectively.   By 2016, these penalties will rise to 2.5% of income or a maximum of $675 per adult ($347.50 per child).  

During its first week of operation, the website users have experienced trouble registering.  The troubles were largely due to high traffic and site overload – a statement in-and-of-itself that Americans are looking for a better way to obtain health insurance.  Once these glitches are resolved, we will get a chance to really see how America is taking to the new age of healthcare
purchasing.