As long as he's permitted to make changes to how the program's run, Pennsylvania Gov. Tom Corbett made it known that he would welcome billions of dollars in federal funds for Medicaid.


But, he stressed, it is not an expansion of the federal insurance program for low-income Pennsylvanians.

 

"This isn't expanding an entitlement, this is a different program," Corbett said outside the emergency room at PinnacleHealth Harrisburg Hospital Monday afternoon. The governor described his plan as a "common sense" approach, aimed at reducing government bureaucracy, allowing more Pennsylvanians access to health care, while also "providing a pathway to independence."

Corbett provided a broad outline for what his plan, "Health Pennsylvania," would entail. Under the Affordable Care Act, states have the option to expand Medicaid, with the feds fully paying for it through 2017 and then scaling back to 90 percent in the following years. Corbett's plan would add a sliding-scale monthly premium for beneficiaries.

Instead of enrolling in a traditional Medicaid plan, newly eligible enrollees would get private, subsidized coverage through the state's new online marketplace, slated to go live in 2014. Corbett's plan also would require that unemployed beneficiaries look for work and connect with job training.

"I think it's very beneficial that we try to help them if they're ... not able to find a job," Corbett said. "Our Department of Labor has a database that is out there of people who have vacancies ... If you don't have the job training for it, we'll work with you to get the job training for it."

Tentative support from health-care community

Several members of the health-care community were on hand as Corbett unveiled his proposal. Doctors and hospital groups in Pennsylvania are pledging their tentative support.

The Hospital and Healthsystem Association of Pennsylvania was among the biggest forces pushing for a Medicaid expansion in the commonwealth. And, though Corbett is adamant that his plan does not represent an expansion, association president Andy Carter says the group supports the broad outlines of the proposal.

"Well, you know, the words are less important to me than the results. If virtually every Pennsylvanian has coverage, that's what I intend to celebrate," he said. "What words we use are less important."

Hospitals are paying close attention to the costs of private health-care options offered to low-income Pennsylvanians, Carter said, as well as changes to coverage provided by Medicaid.

 

Some see relief for the working poor

Medicaid is the state's public health insurance program for poor and disabled residents, run in partnership with the federal government. It currently covers nearly one in six Pennsylvanians, or about 2 million people. Consumer advocates and state officials estimate about 600,000 more residents would be eligible under an expansion, which would, in general, raise eligibility from about 47 percent of the federal poverty level for low income adults to 138 percent.

To receive federal funds, states must maintain the program's current benefit levels and expand the income threshold for residents to qualify. Corbett's proposal would "align Medicaid benefits with private, commercial insurance and the federal standards for essential health benefits" for newly eligible enrollees.

Corbett also wants to do away with a six-month waiting period for the state Children's Health Insurance Program as well as reauthorizing the program. And he wants to put more funds into training primary care doctors and supporting health clinics.

Prior to the announcement, Petrina Sharp, a home-care worker in Philadelphia, spoke of what an expansion would mean to her during a conference call with supporters of an expansion.

"I struggle each day to get by," she said, adding that she can't afford insulin testing strips to manage her diabetes. "I know I could end up in the ER."

Sharp said most people who'd qualify for Medicaid under an expansion are working and that making care accessible would improve the workforce.

Corbett counting on plan's acceptance in D.C.

Corbett said he was confident the Department of Health and Human Services will accept his plan.

"The federal government, if they go – when they go along with this, I'm going to be very positive, because I see no reason that they shouldn't go along with a program like this," he said.

Alan Weil, director of the National Academy of State Health Policy, thinks Corbett's plan is a good start but questions whether it meets federal standards now in place for Medicaid benefit and enrollee cost-sharing designs.

"There are elements as I read it that I'm not sure federal law permits," Weil said. 

Leaders of some states, including Iowa and Arkansas, have proposed similar approaches for putting some eligible enrollees on their state marketplaces. They've requested waivers from the federal government to do this and are awaiting approval. Similarly, Corbett's plan would need federal approval. A spokesperson from the U.S. Department of Health and Human Services said the agency looks forward to working with Pennsylvania on a plan that fits the state and the confines of the law.

Robert Field, a health law professor at Drexel University, thinks the plan to move individuals into the insurance marketplace has potential, especially in that "part of the idea of making Medicaid a state program was to encourage experimentation and to allow different states to go in different directions."

But he also questions whether it will save the state money compared to a traditional expansion.

 

"Private insurance tends to cost more than Medicaid because Medicaid controls the prices it pays providers," Field said. "it has very strict fee-schedules for doctors and hospitals, and it pays the lowest druge prices of any insurance arrangement in the country."

Corbett's announcement follows months of heated debate surrounding an expansion of Medicaid, known in Pennsylvania as Medical Assistance. Corbett, along with many other Republican leaders, has been a staunch opponent of any expansion, citing Medicaid's huge size and cost. It makes up about one-third of Pennsylvania's general revenue budget.

Corbett said competition among private insurers will keep costs down in the new state-based program to expand health insurance to low-income residents.

"If you're talking about 500,000 people that would be able go out on a private exchange and purchase insurance, that competition always lowers prices," he said.