Corbett hasn't closed the door completely on Medicaid expansion in Pa.
February 28, 2013By Taunya English
Right now the answer is "no" but Gov. Tom Corbett says he's open to more talks about a possible expansion of the Medicaid program in Pennsylvania.
Corbett spokeswoman Christine Cronkright says her boss had a brief chat in Washington, D.C., with U.S. Department of Health and Human Services Secretary Kathleen Sebelius.
"They sort of met in the hallway and discussed the fact that they need to sit down and talk a little bit more about Medicaid expansion for Pennsylvania," Cronkright said.
The state is looking to soften the financial blow of adding hundreds of thousands more people to the Medicaid rolls and Corbett's team wants to gauge the Obama's administration's "appetite" for changes to the Medicaid plan.
"We have concerns that it incents employers to drop employees off of their health coverage," Cronkright said. "And that may be another item that gets brought up within that conversation."
The governor may also ask about possible changes to the Medicaid benefits package, she said.
Higher co-pays key for some governors
The executive director of the National Association of Medicaid Directors, a trade group, says some governors are looking for higher co-payments for new enrollees or other ways to shift costs to participants and away from the state.
"A little bit more individual ownership, over health-care decisions, so that might be the type of flexibility that Pennsylvania or other states might pursue in exchange for doing the expansion," Matt Salo said.
Expansion skeptics are surely doing both ideological and financial calculations, he said.
"Does this create -- by paying insurance companies more, paying hospitals more, paying doctors more -- does this create economic activity in your state that will drive economic growth?" Salo said.
For the folks with the consumer health advocacy group Families USA, the answer is a resounding "yes."
New Jersey will gain 14,500 new jobs in the year 2016, as a result of the expansion, according to a Families USA report released this week. The potential jobs-gain estimate for Pennsylvania is 41,200.
Families USA executive director Ron Pollack said the health-care industry will benefit first from a Medicaid expansion, but his analysts used a "multiplier" to guess at a boon for the overall economy.
As more people get coverage under the new health law -- and use health care -- hospitals and health clinics will hire new nurses, for example, Pollack said. Those nurses will, in turn, buy new washing machines and cars, he said.
The Medicaid expansion was designed to be mandatory for every state, but this summer the U.S. Supreme Court stripped away the federal government's "big stick." The Obama administration cannot yank overall funding if a state decides not to expand the number of people who are eligible for the program.
The specter of federal punishment is gone, but Pollack says there are still huge incentives for states to sign on.
Under the Affordable Care Act, the federal government will cover 100 percent of the cost of expanding a state's Medicaid rolls.
The expansion would extend health coverage to most people earning up to 138 percent of the federal poverty level -- $15,415 for working adults or $31,809 for a family of four. The federal pledge to pay 100 percent lasts for three years then decreases to 90 percent in later years.
"A current or future Congress could change that, but as currently constructed, you'll get at least 90 percent federal funding for this group for the foreseeable future," Salo said.
"This is extraordinary because the average amount that the federal government provides to state Medicaid programs is about 56 to 57 percent on the dollar," said Pollack. "So, now that it's providing 90 cents to 100 cents on the dollars, this is a very significant carrot."
Other expansion supporters say -- beyond immediate budget savings -- Pennsylvania will also garner offset savings once there are fewer uninsured people in the state. The theory is that each state will pay out less in charity care and support for people with mental health problems.
'Pennsylvania not a generous state'
Many health-care advocates say it's a misnomer to call the current Medicaid program "a program for the poor." In many states, being poor isn't enough to qualify for the program.
Each state sets its own rules based on income and family status, such as whether a person is parent or not.
"Pennsylvania is not a generous state," Pollack said. "For parents in Pennsylvania, the income eligibility standard for parents that are working is only 58 percent of the poverty level. Translate that into dollars, for a family of three you are ineligible for Medicaid as a parent, if the family's annual income exceeds $11,300."
"In 43 states, for non parental adults -- singles and childless couples -- it makes no difference what that adult's income is, they are just ineligible for Medicaid," Pollack said. "Another way to say that is: You can be literally penniless and ineligible for Medicaid."
"One of the whole points of the Medicaid expansion in the Affordable Care Act is to make it mostly equal in every state," Salo said.
This week, New Jersey Gov. Chris Christie said his state will expand its Medicaid program.
If Corbett sticks with his "no" to the expansion, "that's going to cause a huge inequity," for neighbors just across state lines, said Raymond Castro, senior policy analyst at New Jersey Policy Perspective.