Governor Corbett’s Version of Medicaid Expansion Approved

On August 28th, the Centers for Medicare and Medicaid Services (CMS) announced their approval of Governor Corbett’s Medicaid Expansion alternative, Healthy Pennsylvania. The final proposal is markedly different from the original plan submitted by Pennsylvania’s Department of Public Welfare (DPW), with some of the most harmful elements like punitive lockout periods and tying premiums to a new, bureaucratic work search requirement removed.

Beginning January 1st, 2015, individuals and families with incomes below 138% of the federal poverty level will be eligible to enroll in health insurance offered by private Medicaid Managed Care companies in a new system run by the Commonwealth. 

While the approval of Healthy PA marks a major step forward in covering all Pennsylvanians, serious concerns remain about several key aspects of the final proposal:

PREMIUMS

Under the agreement, DPW has the authority to require low-income Pennsylvanians living between 100 and 138% of the poverty level to pay 2% of their monthly income for coverage starting in 2016. A significant body of research shows that imposing premiums on low-income people leads to poor health outcomes, unmet health needs and loss of coverage.

NEW MEDICAID MANAGED CARE SYSTEM

Rather than cover newly eligible Pennsylvanians through the private plans in the federal Marketplace or through Pennsylvania’s current Medicaid Managed Care system, Healthy PA intends to establish an entirely new, distinct MCO system that will operate independently from but need to interact with existing structures. Pennsylvania has long struggled to seamlessly link health systems, which often results in individuals getting “lost in the system” or experiencing delays and disruptions in their coverage.

The map below by DPW shows the coverage regions under Healthy PA and participating insurers. 

http://www.dpw.state.pa.us/cs/groups/webcontent/documents/document/c_098845.pdf

POTENTIAL FOR FUTURE BENEFIT CUTS

While CMS did not approve significant benefit cuts to the existing Medicaid program under the Healthy PA waiver agreement, they also did not rule them out. Negotiations will continue between PA’s DPW and CMS on changing the scope of benefits for Pennsylvania’s current Medicaid program.

This chart developed by Community Legal Services and the Pennsylvania Health Law Project contrasts current Medicaid benefits with the high and low-risk benefit packages the Corbett Administration is seeking to implement (and move current Medicaid enrollees into based on their score on a 20-question health survey still under development at DPW).

http://clsphila.org/sites/default/files/issues/DPW%27s%20Health%20Care%20Proposal%20Includes%20Severe%20Benefits%20Cuts.pdf

Most current Medicaid recipients would be placed into the most restrictive “low-risk” plan. Some Medicaid recipients with disabilities or other special health care needs would be placed in the “high-risk” plan. The 500,000+ newly eligible people under expansion would be enrolled in private insurance and receive the Essential Health Benefits package.