Corbett plan: Accept Medicaid funding, add requirements

HARRISBURG - Gov. Corbett said Monday that he would accept federal Medicaid funding to insure hundreds of thousands of Pennsylvanians as part of a broader overhaul of the health-care safety net.

Corbett said his proposal would allow new Medicaid recipients to purchase private health insurance, but also would place new requirements on many of the more than one million current adult Medicaid enrollees, including a monthly premium and a job-search mandate.

The plan is aimed at reducing costs and streamlining services while offering greater access to those who need medical care, Corbett said.

"We cannot afford to expand the current Medicaid program. It is an entitlement that is unsustainable," he said at a news conference at Harrisburg Hospital. "If the goal is to give everybody quality and affordable health care, this is Pennsylvania's way of doing that."

The announcement came after months of discussion between the Corbett administration and the federal Department of Health and Human Services, and lobbying in the Capitol by proponents of Medicaid expansion.

Twenty-five states are moving forward with Medicaid expansion, which begins Jan. 1.

Corbett, who became the 10th Republican governor to accept Medicaid funding, initially rejected expansion in his February budget address, but later said he was open to the idea if the federal government allowed him the flexibility to design a plan tailored to Pennsylvania's needs.

While Corbett offered a broad outline of what he would like to achieve, largely missing from the announcement were details of how or when the proposal would be rolled out, and whether there was an alternative plan to provide coverage for the uninsured if this proposal failed to win federal approval.

The Affordable Care Act expands coverage to individuals and families earning up to 138 percent of the federal poverty level, or up to $15,800 for an individual or $32,400 a year for a family of four.

Under the "Healthy PA" plan, "able-bodied" non-elderly people on Medicaid who are unemployed would be required to look for work, and Medicaid recipients - except children, the elderly, the disabled, and the very poor - would have to pay a premium, on a sliding scale, of up to $25 a month.

The fee will drop, Corbett said, if certain health-care goals - such as lowering blood pressure - are met.

Arkansas and Iowa have sought similar waivers to use private insurers that have not yet been approved. No other state has proposed a work requirement.

A spokesman for Health and Human Services said the agency was ready to work with Pennsylvania officials to find options that meet its needs.

"We are encouraged by Pennsylvania's commitment to helping cover more of the state's uninsured population," Fabien Levy said.

One expert in health-care law and state social-service policies said the announcement was just the start of what is likely to be a long process.

"The changes to the existing program are pretty significant," said Fran Grabowski, a lawyer with Post & Schell's Health Care Group.

She said states had proposed cost-sharing programs that were rejected by the federal government or the courts.

"It will raise concerns among stakeholders," said Grabowski, who spent 35 years as a state attorney in the Department of Public Welfare and the Office of General Counsel. "On the other hand, government wants to give flexibility with the expansion and may be willing to accept changes that it did not in the past."

The Corbett proposal was embraced by hospitals, for which uncompensated care has become an increasingly heavy burden, as well as physicians and major insurance companies.

Reaction from lawmakers was mixed. Some conservative members of the House blasted the proposal, while more moderate Republicans said they were pleased the process to expand coverage was moving forward, and some Democrats expressed frustration that it took so long.

"Today's announcement by Gov. Corbett is a huge step toward securing that mutual objective, and I applaud him for taking this step," said Senate Majority Leader Dominic Pileggi (R., Delaware). "It would be foolish to leave billions of Pennsylvania tax dollars in Washington, D.C., when that money can be used to expand health-care coverage and access to the residents of our state in a fiscally responsible way."

Administration officials said they were prepared to advance their proposal once they get the go-ahead from the federal government.

Once the formal waiver is submitted, it must go through a 30-day comment period, with additional time for the state to respond, which could delay coverage expansion into 2014 or 2015.

Under the Affordable Care Act, the federal government pays the full cost of Medicaid expansion for three years, beginning Jan. 1, and no less than 90 percent after 2017.

Corbett administration officials neither offered estimates of how many new people would be covered - although most estimates suggest it is at least 500,000 people - nor details of the savings attributed to the cost-sharing plan.

Officials said reducing the number of people on Medicaid by finding them jobs with health coverage would reduce overall costs, and instituting premiums for those on Medicaid would help pay for the plan after 2017, when Pennsylvania has to chip in its share.