Pa. Medicaid expansion may pave way for four other red states

Now that Pennsylvania Republican Gov. Tom Corbett has received CMS approval for his Medicaid expansion plan, Indiana, Tennessee, Utah and Wyoming look like they are next in line among GOP-led states in seeking a green light for their expansion proposals.

Utah Gov. Gary Herbert has scheduled meetings with HHS Secretary Sylvia Mathews Burwell this month to discuss his waiver proposal to expand coverage to about 100,000 adults with incomes up to 138% of the federal poverty level. Last week, Tennessee Gov. Bill Haslam told reporters that he would “probably” submit a Medicaid waiver proposal this fall for expanding the program to 162,000 more adults. Wyoming Gov. Matt Mead reportedly also has begun talking with the Obama administration about extending coverage to about 18,000 low-income residents. Indiana Gov. Mike Pence has a pending waiver request that was submitted in July.

Republican governors are continuing to push for conservative-oriented features such as reliance on private insurers, increased beneficiary cost-sharing, job search requirements, financial incentives linked to healthy behaviors and reductions in benefits such as non-emergency transportation. After seeing the CMS' decision on Pennsylvania, the governors have a clearer idea of what will and won't fly with the administration.

Last month, the CMS granted Pennsylvania a five-year waiver for its plan to extend Medicaid coverage starting Jan. 1 to more than 500,000 residents through the state's current Medicaid managed-care plans. Pennsylvania is the 27th state to accept the Medicaid expansion authorized by the Patient Protection and Affordable Care Act.

Starting in 2016, new beneficiaries in Pennsylvania with incomes above 100% of poverty will have to pay premiums of up to 2% of their income. Beneficiaries who don't pay could be dropped from the program. Corbett also won approval for a voluntary pilot program to encourage participation in job training and work opportunities. Those who participate will pay reduced premiums and cost-sharing. But the CMS nixed Corbett's proposal to tie Medicaid eligibility to employment or an active job search. It also rejected a bid to charge premiums to adults under the federal poverty level.

Still, Utah's Herbert wants the CMS to allow his state to require new Medicaid beneficiaries to have a job or be actively searching for one. “The lone remaining negotiation point is our desire to require recipients that are able to work to either be employed or to be participating in employment training,” said Tom Hudachko, a spokesman for the Utah Health Department.

It's too soon to tell if the governor would withdraw his expansion proposal if the CMS rejects that requirement, he added.

Medicaid patient advocates are nervous about the issue. Herbert “needs a win (on the work requirement) to bring back to the Utah legislative body to show his plan is different from a straightforward Medicaid expansion,” said RyLee Curtis, Medicaid policy analyst at the Utah Health Policy Project.

Another expert said it's unlikely the Obama administration will concede. “It's completely against the nature of the Medicaid program, which is supposed to be an entitlement for those with low income,” said Tim Jost, a Washington and Lee University law professor. “A work requirement would turn it into another welfare program.”

So far, the CMS also has rejected proposals to charge premiums to individuals under the poverty level. That hasn't stopped Indiana's Pence from seeking permission to require adults under the poverty line to make a contribution of $3 to $15 a month to a health savings account. Pence's proposal would not terminate coverage for those who do not make a contribution, but those who don't contribute would be moved to a more basic coverage program that doesn't include vision and dental benefits. In addition, they would be liable for copayments.

In Tennessee, it's unclear what Haslam's Medicaid waiver proposal might include. He's expected to propose a model in which the state uses the federal Medicaid expansion dollars to buy private plans for newly eligible residents.

If Haslam wins approval to expand Medicaid in Tennessee, that could have a major effect on other Southern states, said Sam Brooke, a staff attorney at the Southern Poverty Law Center. Currently, the only state in that region that has expanded Medicaid is Kentucky, which has a Democratic governor.

“In the South, not expanding Medicaid has mostly been about reacting politically, with the thought that anything that supports Obamacare is a bad idea,” Brooke said. “If a Southern state can say, 'We're going to put politics aside as we realize we can help people,' it would send a loud message.”

Follow Virgil Dickson on Twitter: @MHVDickson