HARRISBURG -- The state will essentially drop a controversial work-search requirement it had sought to impose as part of its overhaul of Pennsylvania's Medicaid program, according to documents that became public Thursday.
A letter from Gov. Tom Corbett to Kathleen Sebelius, U.S. Department of Health and Human Services secretary, says the governor wants to "move forward in good faith and work towards a reasonable compromise" on the matter. He is instead proposing a voluntary pilot program called "Encouraging Employment."
No other state has a work requirement for its Medicaid program, and state officials had acknowledged it would be difficult to get the federal government to agree to such a condition for the low-income individuals the program serves.
Corbett administration officials disputed Thursday the idea they were dropping the requirement, however.
"This is not dropping anything," said Jay Pagni, a spokesman for Mr. Corbett. "We're willing to have an alternative so that this does not block the entire [Medicaid] waiver."
"We're not [dropping it]," said Jen Branstetter, director of policy and planning for the administration, adding that the waiver is a test as to whether the Obama administration is willing to work in good faith with the state.
She characterized the new proposal as a "potential modification."
The original requirement would have applied to some of the approximately 500,000 people who will become eligible to purchase private health insurance with a subsidy if the governor's Healthy PA plan is approved. Certain groups such as the elderly, disabled, and pregnant women would have been exempt -- as well as those already employed.
The entire plan is pending approval by the federal government. Medicaid is a state-operated health insurance plan for poor and disabled people, funded jointly by state and federal governments. The 2010 Affordable Care Act seeks to expand Medicaid eligibility nationwide and is offering states billions of dollars to make that expansion happen.
But so far, Pennsylvania has not expanded or otherwise modified its Medicaid program. In order to get the federal expansion money, HHS must sign off on any program changes.
Democrats and other critics of the governor have said a straightforward expansion of traditional Medicaid would be faster, easier, and take advantage of federal funds.
State Sen. Vincent Hughes, D-Philadelphia, one of the Legislature's strongest proponents of Medicaid expansion, said he viewed the proposed change as a step in the right direction but also characterized it as a "baby step."
In his Wednesday letter to Ms. Sebelius, Mr. Corbett now proposes a "voluntary, one-year pilot program" to provide access to job training; participants would see a reduction in their premiums as an incentive to participate. People working 30 hours or more per week would see a premium or copayment reduction of 40 percent, those working 20-29 hours per week would see a 25 percent reduction and those in the voluntary program working less than 20 hours would be asked to register on the state's Job Gateway website and agree to engage in job-training activities each month.
The program would be completely voluntary and would not be a condition of eligibility, according to an outline sent to HHS with Mr. Corbett's letter.
One critic of Mr. Corbett's Healthy PA proposal said she saw it as encouraging that the governor was willing to be flexible on this point, but approval of his job-search plan was still unlikely.
"Medicaid is not a job-training program. Running a pilot program that is a job-training program is not what Medicaid dollars are intended for," said Joan Alker, executive director of the Georgetown University Center for Children and Families and an expert on Medicaid waivers.
Kate Giammarise: email@example.com, 1-717-787-4254 or Twitter @KateGiammarise. First Published March 6, 2014 1:49 PM