Pennsylvania relents on co-payments, for now
October 8, 2012By Taunya English
Pennsylvania child health advocates are celebrating a temporary win. Friday the state Department of Welfare said it is delaying a plan to charge healthcare co-payments for a group of children with disabilities enrolled in the Medical Assistance -- or Medicaid -- program.
Advocates don't like the term, but the group includes about 48,000 families sometimes called "loophole" families. They earn 200 percent, or more, of the federal poverty level. That's about $46,000 a year for a family of four
Normally children in those families would not qualify for Medical Assistance, but in Pennsylvania they get help because of the severity of their child's disability, such as autism or seizure disorders.
"Currently, Pennsylvania is the only state that allows a child whose disability does not require institutional care to be eligible for Medicaid without considering the parent's income, child support or Social Security benefits received by the child," Department of Welfare spokeswoman Donna Morgan said in an email.
Morgan said the exception or "loophole" costs Pennsylvania about $700 million each year, and the state has been "generous." Now, Pennsylvania is asking those families to help with cost sharing," she said.
In 1988 the exception served two families. Today there are 48,000 in the "loophole" category.
"We are trying very hard not to use that term," said Liz Healy, director of the Peal Center, a parent training and information group. "We don't want to give the impression that people have found a way around something," Healy said.
"It's been a way for families to pay for services, and sometimes very expensive services for their children," Healy said. "It insures that children with disabilities have access to all the health care they need."
Morgan said the co-payment requirement was capped at 5 percent of a family's monthly income and there is a long-list of exceptions – including some preventive care – for which the co-pay is waived.
Still, Healy said for families with very modest means it was going to be a "very significant" problem.
Before Friday's postponement, the co-pay fees were set to range from as low as $2 to as much as $100 per service. Families at all income levels would pay the same per service fee, but the yearly co-payment obligation was capped at 5 percent of a family's income.
"On a day-to-day basis, visit-to-visit basis, when you're picking up a prescription or picking up an X-ray, it would be hard to anticipate what the fee would be," Healy said.
The Department of Welfare said it will work with families on a plan to charge a monthly premium, instead of the co-payments.
Healy said the flat-fee approach allows families to budget ahead.
"That would be a much fairer way to do it, if there were a graduated scale based on income," Healy said. "We also hope that they would look at other out-of-pocket health expenses, not only gross income."
In a statement Department of Welfare Secretary Gary Alexander said, "the department has always preferred the option of applying a premium to this program and will be working with stakeholders who have come to us in support of a premium as opposed to the co-payment."
Federal hurdles ahead
In 2011, Pennsylvania asked the Centers for Medicare & Medicaid Services for a waiver to implement the premium program.
"We have had a verbal response that they are not yet convinced that this is the way to go," Morgan said. She said the state is hoping that with swelling community support behind the plan, the federal government will reconsider.
Jim Bouder is a Lancaster County dad, his 17-year-old son has autism. He said there's much discussion and negotiation still to do.
"What we hope we've achieved today is an opportunity to engage in a dialogue," Bouder said. "We are grateful to the Department of Welfare for realizing the co-pay plan was not ready for prime time," he said.
"We are not categorically opposed to cost sharing, as long as we and all interested parties have a seat at the table," Bouder said.