Healthcare Business News

Pennsylvania to expand Medicaid, but with strings attached

By Virgil Dickson
Posted: August 29, 2014 - 4:15 pm ET

The Medicaid agreement between the Obama administration and Gov. Tom Corbett will extend coverage to more than 500,000 Pennsylvanians, but advocates for the state's low-income residents continue to express concern over some of concessions the CMS made to get another Republican-led state to expand the program.

Under the agreement, all residents with incomes up to 138% of the federal poverty level will be eligible for Medicaid coverage beginning Jan. 1, 2015. Beginning in 2016, those with incomes above 100% of the federal poverty level will have to pay premiums for coverage plans that equate to no more than 2% of their total household income. Beneficiaries who fail to pay could be dropped from the program.

The broad outlines of the plan resemble elements of waivers granted to other Republican-led states. For example, the Pennsylvania waiver allows the state to provide premium assistance to its expansion population to shop for private plans on an exchange. Arkansas and Iowa adopted similar models. Other states, including Iowa, have similarly received permission to charge premiums for certain beneficiaries.

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“HHS has stuck to the lines that they've previously drawn in other states,” said Leonardo Cuello, director of health reform for the National Health Law Program. Corbett initially intended to require that beneficiaries be employed or looking for work in order to keep their benefits. That request was dropped.

However, Cuello and other advocates still have concerns about some of the concessions CMS made to the state. Most troubling, he said, is that the CMS expressed some willingness to allow the state to impose limits on benefits at a later date.

Pennsylvania asked for permission to limit the number of times a beneficiary could go to a doctor, be hospitalized or receive certain tests. The CMS said it would consider those requests pending data from the state showing the changes would not harm enrollees. “That is very, very scary,” Cuello said.

And even though Iowa got approval for premiums, the waiver capped the amount at $10. Pennsylvania's waiver means low-income residents may have to pay as much as $30 a month, depending on how much they earn.

“Twenty dollars may not sound like a lot, but at this income level it can be,” said Richard Weishaupt, senior attorney for Community Legal Services of Philadelphia. “If there is some sort of emergency, like their electricity gets cut off, or their car breaks down, families might not be able to come up with that $20 a month.”

Pennsylvania's model allowing new beneficiaries to shop for plans is in its beginning stage and could create barriers. State residents who buy coverage subsidized under the Affordable Care Act enroll in plans through the federally run marketplace using New Medicaid beneficiaries, however, will choose managed-care plans through a new online marketplace run by Pennsylvania's Department of Public Welfare.

The dual systems could be disruptive for residents whose incomes fluctuate above and below the eligibility threshold, forcing them to choose new plans and providers as they move from one marketplace to the other, Weishaupt said. Medicaid advocates also worry about the bureaucracy of having a separate network of managed Medicaid plans just for the expansion population.

Corbett, meanwhile, faces a tough election this fall. He trailed Democratic challenger Tom Wolf by a 25-point margin in a recent poll.

Political pundits in the state are split on whether Corbett's Medicaid victory will give him enough of a bump to turn his ratings around.

Wolf, meanwhile, supports straightforward Medicaid expansion. If he wins, he would have the leeway to alter or dismantle the waiver, according to Antoinette Kraus, director of the Pennsylvania Health Access Network, a statewide healthcare coalition.

Follow Virgil Dickson on Twitter: @MHvdickson

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