Federal regulators approve Gov. Corbett's 'Healthy PA' Medicaid overhaul
August 29, 2014 12:29 AM
Gov. Tom Corbett plan would offer subsidies to 500,000 low-income Pennsylvanians to purchase private insurance.
By Kate Giammarise / Post-Gazette Harrisburg Bureau
HARRISBURG — Pennsylvania’s working poor could start receiving subsidized health insurance as early as Jan. 1 now that the federal government has approved the state’s proposed Medicaid overhaul.
Federal regulators approved much of Gov. Tom Corbett’s “;Healthy PA” plan, the state and federal governments confirmed Thursday, ending months of negotiations between the two parties. Enrollment in what’s being called the “Healthy PA Private Coverage Option” will begin Dec. 1.
Mr. Corbett’s plan, unveiled last year and formally submitted to the federal government for review in February, would not directly expand the state’s Medicaid program, but would instead offer federal subsidies to low-income Pennsylvanians to purchase private insurance. As many as 600,000 uninsured Pennsylvanians could be eligible, according to the state’s latest estimates.
“From the beginning, I said we needed a plan that was created in Pennsylvania, for Pennsylvania — a plan that would allow us to reform a financially unsustainable Medicaid program and increase access to health care for eligible individuals through the private market,” Mr. Corbett said in a prepared statement.
Healthy PA would also make sweeping and somewhat controversial changes to the existing Medicaid program, such as allowing some low-income individuals to be charged premiums for coverage and consolidating most existing benefit plans.
The governor’s proposal to reduce the number of Medicaid plans from 14 to two (a high-risk and low-risk plan) will be permitted, as will allowing premiums for people earning above 100 percent of the poverty level, starting in 2016.
The Republican governor had already agreed to back down from one of the most controversial aspects of the plan, agreeing to change a work search requirement that he originally sought to impose into a voluntary pilot program.
No other state imposes such a requirement for enrollment in its Medicaid program, and the state had acknowledged it would likely be difficult to get federal regulators to agree to it. The state had also agreed not to cut the Medical Assistance for Workers with Disabilities program, which covers 33,000 low- and middle-income Pennsylvanians with disabilities.
“Gov. Corbett is the first governor to tackle much-needed Medicaid reforms since the program’s creation, with the goal of protecting Pennsylvania taxpayers and looking ahead to maintain a safety net for those who most need public assistance,” said Beverly Mackereth, Pennsylvania Department of Public Welfare secretary, in a prepared statement.
Medicaid eats up nearly 30 percent of the state’s general fund expenditures.
The budget approved by state lawmakers in June and signed by the governor in July assumes $125 million in Medicaid-related savings from Healthy PA.
Medicaid expansion was a key part of President Barack Obama’s 2010 health care overhaul, and was intended to help insure 17 million Americans who were previously unable to obtain or afford health insurance.
The federal government committed to pay nearly $1 trillion to help states pay for the expansion.
But two years later, a U.S. Supreme Court decision made the Medicaid expansion optional for states. Some states have opted not to take part in the expansion; others, such as Pennsylvania, are using the cash to revamp the original Medicaid model significantly, in a manner more palatable to the state’s Republican Legislature and governor.
The governor’s critics have said Healthy PA will create more barriers to care and cut benefits, while a straightforward expansion of the federal Medicaid program would have covered the uninsured sooner and with more comprehensive coverage. Mr. Corbett’s gubernatorial opponent, Democrat Tom Wolf, has said he favors a Medicaid expansion.
However, the Corbett administration says that private coverage is more desirable than a government plan — because of Medicaid’s low payment rates to doctors, some primary care physicians aren’t eager to take on new Medicaid patients.
By giving the Medicaid-eligible population a private health plan, such as Highmark or Aetna, the poor should have better access to health care.
It’s not clear what would happen to the program in the event of a victory by Mr. Wolf in November’s gubernatorial election.
A statement from the Wolf campaign said the governor should have expanded Medicaid.
Mr. Corbett’s policy director, Jen Branstetter, said it would be “unfortunate” if the plan were cast aside due to a change in administrations.
“That would mean that folks would not get coverage as of Jan. 1, which is the goal, to get folks covered as quickly as possible,” said Leesa Allen, the executive Medicaid director in the state Department of Public Welfare.
In documents approving the program waivers sought by Pennsylvania, the U.S. Centers for Medicare & Medicaid Services said it was approving a five-year “demonstration project” through Dec. 31, 2019.
The state has the ability to shift course, if it so chooses: “The state [may] suspend or terminate this demonstration in whole, or in part,” so long as it notifies CMS and program beneficiaries and comes up with a phase-out plan.
In its own statement, CMS sought to paint the approval as a Medicaid expansion and a victory for Obamacare, saying Pennsylvania was the 27th state, plus Washington, D.C., to accept the federal Medicaid subsidies.
“Like we are doing in Pennsylvania, [the U.S. Department of Health and Human Services] and CMS are committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals,” said CMS administrator Marilyn Tavenner. “But, unfortunately, millions of Americans are still without Medicaid coverage because their state has yet to act.”
Several advocacy groups said Thursday they were pleased more Pennsylvanians would be receiving health care coverage, and were also pleased the work-search requirement had been removed from the final agreement.
However, they expressed concerns that even small premiums would result in lost coverage.
“The agreement allows Pennsylvania to impose the highest Medicaid premiums of any state in the country beginning in 2016, despite a significant body of research that shows that premiums for low-income people result in loss of coverage, unmet health care needs, and adverse health outcomes,” according to Community Legal Services of Philadelphia.
Also of concern: The creation of a new system of private coverage, separate from the existing Medicaid managed care system, could cause people to lose coverage as they move between the systems due to income fluctuation, family size changes, or doctors being covered in one program but not the other.
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