After two other states got a federal OK for the Medicaid "private option," Pennsylvania Gov. Tom Corbett is asking to use a similar version of the policy, with more cost-sharing, plus requirements that have never been approved anywhere before.
The Pennsylvania Department of Public Welfare submitted Corbett's "Healthy Pennsylvania" Medicaid waiver proposal to the Centers for Medicare & Medicaid Services in late February, after a round of public comment and many warnings that the most controversial idea -- a work requirement provision -- won't fly under federal law.
The "Healthy Pennsylvania" plan would expand Medicaid eligibility to single adults via specially subsidized private health plans to be made available through the public insurance exchange, along the lines of Medicaid expansion plans taking effect this year and next in Arkansas and Iowa.
Pennsylvania has some of the lowest pre-Affordable Care Act thresholds for Medicaid eligibility: unavailable to childless, nondisabled adults, and 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's Medicaid private option would cover about 500,000 currently uninsured Pennsylvanians earning up to 133 percent FPL, about $15,000 for a single person and $33,000 for a family of four.
The Corbett Administration argues in the waiver application, however, that Medicaid should be limited to "a transitional benefit" and that beneficiaries would "ultimately" be best served through private employer-sponsored insurance.
To do that, Corbett, a Republican, is proposing something his critics not only disagree with but argue is a lost-cause: a work training and job application requirement for unemployed beneficiaries.
In 2016, what would be the second year of the five-year Medicaid demonstration, the Corbett Administration is proposing that private option beneficiaries who are able to work but working less than 20 hours per week participate in job training and "employment-related activities" as part of "an integrated approach to improving their health and helping them move out of poverty through employment."
On the flip side of that proposal, beneficiaries working more than an average of 20 hours a week would be eligible for a reduction in monthly premiums and cost-sharing or "other incentives."
Beyond the work search and training proposals, incentives for wellness visits and health improvements play a big role in Pennsylvania's waiver application.
In the second year of the demonstration, Corbett's Administration is seeking to require "nominal" premium and contributions from private option enrollees earning more than 100 percent FPL, in part to "prepare these individuals for healthcare coverage financial obligations that will become their responsibility when their income increases and they move into private health care coverage."
Starting in the second year, most beneficiaries would be subject to a $10 copayment for using emergency room care in cases where the ER isn't warranted, and they'll also be incentivized to complete health risk assessments.
Pennsylvania's waiver for the private option, if approved, would in many ways build on the Medicaid managed care program already in place, with participants that include Aetna, AmeriHealth Caritas (a venture of Independence Blue Cross and Blue Cross Blue Shield of Michigan), Coventry, Geisinger Health Plan, UnitedHealth Group and UPMC.
The association representing those Medicaid plans, the Pennsylvania Coalition of Medicaid Assistance MCOs, has some reservations with Corbett's proposal, though.
While they support the private option policy, the group's director, Michael Rosenstein, argued in comments on the proposal that "a new set of premiums, copays, pricing structure and other requirements" could be "problematic" for insurers' federally-facilitated exchange products. "Cost neutrality may be difficult to achieve in a full (qualified health plan) environment," he wrote.
Rather than selling the Medicaid private option plans in the exchange, the group is proposing that a "specialized commercial marketplace be established as a structure that embraces the concepts of private market insurance but has the flexibility to incorporate the Pennsylvania-specific aspects of Healthy PA." -- something Corbett's plan
The Pennsylvania Hospital and Health System Association, meanwhile, appears pleased with the plan. "We fully support the final document, as it offers an effective and workable program to address the health care and wellness needs of low-income Pennsylvanians," CEO Andy Carter said in a statement.
Last year, Pennsylvania's Medicaid program cost state and federal taxpayers a total of $24 billion to cover about 2.2 million residents, with the state's share accounting for close to 30 percent of its general fund. With its federal matching rate decreasing by just under 1 percent to 53.5 this fiscal year, Pennsylvania is losing some $320 million.