Even before federal approval is won for the experimental program, insurers in one large state are ready to start selling exchange plans to Medicaid beneficiaries.
Pennsylvania Gov. Tom Corbett says his administration has found strong support from nine health plans and managed care organizations for the Healthy Pennsylvania Medicaid waiver demonstration currently under consideration by the Centers for Medicare & Medicaid Services.
In addition to introducing new sliding scale cost-sharing, Corbett's plan would expand Medicaid eligibility to single adults via subsidized private health plans available in the federally-run insurance exchange, along the lines of the "private-option" Medicaid programs in Arkansas and Iowa.
"In order to avoid delaying coverage to uninsured Pennsylvanians, we and HHS agreed that it would be sensible to move forward with soliciting applications from (insurers) while the waiver is being negotiated," Corbett said in a media release. "The number of applicants demonstrates that this innovative approach can and will work once approved."
Pennsylvania's private option plan could cover as many as 500,000 currently-uninsured residents earning up to 133 percent of the federal poverty level, and Corbett's administration has tentatively found at least three insurers to offer Medicaid-subsidized plans in all of the nine regions -- exceeding the goal of having at least two options across the state.
Only Independence Blue Cross is planning to sell in all the regions, through its Vista Medicaid plan, but the regions will be quite competitive, with some having five or six options.
In the five county greater Philadelphia area, new Medicaid beneficiaries can choose between Aetna, UnitedHealthcare, IBC's Vista, the nonprofit HMO Gateway Health Plan, and Health Partners, a plan owned by six Philadelphia hospitals and health systems, including Temple University Hospital.
Across the state in greater Pittsburgh, there will be just as many, with Aetna, United and IBC's Vista available alongside plans from the region's two dominant insurers, UPMC Health Plan and Highmark's Keystone West.
And in the four county area of south central Pennsylvania, there will be six options: Geisinger Health Plan, United Healthcare, UPMC, Gateway Health, IBC's Vista and Capital Blue Cross.
Pennsylvania currently has some of the lowest thresholds for Medicaid eligibility: excluding childless and nondisabled adults and available only to adults with dependent children earning below 38 percent of the federal poverty level, pregnant women earning up to 185 percent FPL (or less, depending on if they have multiple children) and low-income disabled and elderly residents receiving long-term services.
Corbett says his Healthy Pennsylvania plan has two modernization goals: "making common-sense reforms to the current Medicaid program to better align the benefits with individual needs and the nationally established essential health benefits" and offering an expansion option that taps into the private sector.
One long-sought idea included in the proposal is not likely to fly with the feds -- a work requirement provision for beneficiaries. But CMS has recently shown itself open to permitting some limited cost-sharing in Michigan and Iowa.
In the second year of Pennsylvania's private option policy, Corbett is seeking to require "nominal" premium contributions from private option enrollees earning more than 100 percent FPL, to help "prepare these individuals for healthcare coverage financial obligations that will become their responsibility when their income increases and they move into private care."
In the second year, according to the application, most beneficiaries would be subject to a $10 copayment for using emergency room care in cases where the ER isn't warranted, while also being offered cost-sharing reduction incentivizes to complete health risk assessments.
Corbett is hoping the program can get approval soon and start by January 1, 2015.