HARRISBURG, Pa. - Gov. Tom Wolf signed legislation creating a state-based health exchange Tuesday.
The exchange is expected to be operational as early as Jan. 1, 2021. It aims to save money for those purchasing plans on the exchange, the governor's office said Tuesday.
The state has relied on the federal health insurance exchange since the implementation of the Affordable Care Act in 2010.
To cover costs, the federal government charges insurers a 3.5 percent fee on premiums paid by ACA enrollees each month, a projected $98 million for Pennsylvania insurers in 2019.
The user fee is expected to be cut to 3 percent beginning in 2020, which would equate to approximately $88 million from Pennsylvania insurers.
When the state begins to take steps towards operating its own exchange in 2020, the user fee remitted to the federal government will be collected by the state. The state will collect the fee incrementally for the first year and then in full in 2021.
Through a federal waiver, the state will create a reinsurance fund that will directly pay some of the health care costs for high-cost individuals, the governor's office said.
The governor's office said the combined savings and anticipated federal government reinsurance contribution will save Pennsylvanian consumers up to $250 million in annual health insurance premiums.
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