The Medicaid Deal

Gov. Tom Corbett’s Healthy PA initiative is gaining some support.

As an alternative to the Medicaid expansion included in the Patient Protection and Affordable Care Act (ACA), Corbett is seeking waivers for Pennsylvania to implement it’s own expansion of health coverage for low-income individuals as part of the Healthy PA initiative.

The plan to expand health care coverage to low income individuals was included in his proposed budget, which relies on federal approval and implementation of the plan to balance.

“That’s the hold-up,” Rep. Kathy Rapp said of the federal waiver request.

The federal initiative expands the Medicaid program to individuals making up to 138 percent of the federal poverty line in exchange for federal funding of 100 percent of the expansion in 2014 and 90 percent in following year and was envisioned as a nation-wide program.

That all changed following the U.S. Supreme Court ruling which upheld the ACA overall, but made the expansion optional.

While 24 states thus far have decided to implement the expansion, Corbett has decided Pennsylvania will not take the expansion.

Instead, he is hoping to join Iowa and Michigan in receiving a waiver from the U.S. Department of Health and Human Services to implement an alternate plan to expand coverage utilizing the increased federal funds available for the Medicaid expansion.

Corbett’s plan would extend health coverage to individuals making up to 133 percent of the federal poverty line, an increase from the current 33 percent to qualify for Medicaid in Pennsylvania, but it wouldn’t do it through the Medicaid program. Instead, Corbett proposes providing subsidized private market health insurance plans with minimal monthly premiums to low-income individuals.

The initiative also includes a work requirement for some individuals.

If granted the waiver, Corbett’s plan would go a step further and move some individuals currently on Medicaid into private market health insurance plans. Some current Medicaid recipients would be moved to private plans, others would be moved to one of two state plans with benefit caps and a small number would retain existing coverage.

Low-income individuals would be offered plans that would be purchased through the existing federal exchange that was also created as part of the ACA or through other private markets.

Pennsylvania is one of 27 states that utilize the federal exchange, as Corbett also opted out of creation of a state-run marketplace allowable under the ACA.

If subsidized purchase of health insurance from a private sector business through a marketplace sounds familiar, that’s because it’s exactly how the exchanges set up under the ACA work.

“It does (look like health exchanges),” Rapp conceded when asked. “It’s an election year. The governor is definitely trying to reach out to folks that, maybe he has perceived that he can help out better. Giving more money to maybe those who would oppose him for whatever. This governor firmly believes that low income people should have coverage, but that they should also contribute as much as possible too.”

Corbett is touting the plan as an alternative to the expansion that will utilize private insurance “market efficiencies”, minimal premium payments and coverage caps to save Pennsylvania money for one of the largest segments of the commonwealth’s budget.

“This is medical assistance,” Rapp said. “Pennsylvania does a wonderful job covering our children. I think this governor has worked very hard to eliminate any type of waiting list to insure our children and it’s a model program for the nation, the CHIP program. At the same time, again, it’s the largest growing part of the budget and with the Affordable Care Act, it’s going to be increased even more.

“The problem is, with accepting money from the federal government, I use the example of special education. Way back when, when they passed the special education law at the federal level. the federal government at that time when they were asking states to implement special education, the federal government promised that they would fund 40 percent of the cost and right now it’s down to about 17 percent. So we have a track record of the federal government not holding true to their promises and saying that we’re going to keep giving you this money. So that’s one of the reasons the gov. and the state of Pennsylvania is not embracing the affordable care act and we have the alternative but we’re still waiting for the feds to approve it.”

In all, Corbett is requesting 24 requirements of the Medicaid program and expansion be waived to allow the commonwealth to implement Healthy PA as an alternative to expanding Medicaid while still utilizing the increased federal funds offered with the expansion.

The waivers are being requested through a 1115 demonstration application, which allows states, with federal approval, to waive Medicaid program requirements to implement pilot programs for a set period of time to demonstrate its effectiveness. Corbett has requested permission to run the program for five years beginning in 2015.

The Hospital and Healthsystem Association of Pennsylvania (HAP), which supported accepting the federal Medicaid expansion, is supporting the initiative.

“Pennsylvania hospitals unequivocally support strengthening Medicaid to ensure effective insurance coverage and access to quality care for all Pennsylvanians,” Andy Carter, the association’s president and CEO said in a Feb. 19 release. “We also support the broad aims of Healthy Pennsylvania – access, quality and affordability.

“Since the introduction of the Healthy Pennsylvania initiative, HAP has been engaged in productive conversations with the Corbett administration to refine the details of the state’s proposed Healthy Pennsylvania 1115 Demonstration Application. As a result of these discussions, we fully support the final document, as it offers an effective and workable program to address the health care and wellness needs of low-income Pennsylvanians.

“On behalf of the state’s hospital and health system community, I will be submitting a letter of support to the Centers for Medicare & Medicaid Services requesting their expeditious review and approval of the application.”

Warren General Hospital (WGH), a HAP member, also supports the program.

“Warren General Hospital believes that Governor Tom Corbett’s Healthy PA plan to improve access, ensure quality and provide affordability may help to address Pennsylvania’s health care deficits,” WGH Chief Executive Officer John Papalia said.

“Warren General Hospital continually sees an increasing amount of uncompensated care,” Holli Summerville, WGH Director of Patient and Public Relations, said. “The plan may address some of these issues. Under the plan all children in Pennsylvania will be insured. The plan is also proposing to increase access to approximately 520,000 uninsured, low income individuals.”

Corbett’s application, which includes waiver requests, was submitted to the U.S. Department of Health and Human Services on Feb. 19. There is no timeline for the department to approve or reject the request. However, Pennsylvania’s budget process wraps up in June and the governor’s proposed budget assumes implementation of the Healthy PA initiative.

Further information on the Healthy PA initiative, including Corbett’s 1115 application containing an outline of the plan and listing of waivers, is available at www.dpw.state.pa.us/healthypa.