Health & Human Services

Pennsylvania Becomes 9th Republican State to Expand Medicaid

Pennsylvania got some of the conservative changes it asked for, but the plan approved by the federal government contains a number of departures.
by | August 29, 2014
For over a year, the Corbett administration has gone back and forth over special amendments to enact a more conservative expansion. AP/Marc Levy

Pennsylvania Gov. Tom Corbett got his wish Thursday, joining eight other Republican governors among the states that have expanded Medicaid to more low-income adults.

The announcement from the Centers for Medicare and Medicaid Services that about 500,000 state residents will gain coverage through the program has been close to a year in the making, with negotiations going back and forth over special amendments requested by the Corbett administration to enact a more conservative expansion.

One of those, a request to require new recipients to actively search for work, was jettisoned months ago. Many Medicaid experts say federal law forbids work requirements because they fall outside the scope of a program designed to improve the health of low-income people. But the state did get a version of the provision that will help link Medicaid beneficiaries to employment but, by law, will have no bearing on their eligibility for coverage or their costs.

The Corbett administration also originally pitched its plan as a “private option” along the lines of Arkansas, which uses state and federal money to pay for private health plans on the insurance exchanges available in every state for higher-income individuals. But the plan approved by CMS says that coverage will instead go through managed-care companies that have contracts with the state.

Managed-care companies are often spin-offs of major private insurers that handle the administrative work of the state in exchange for a capped fee per member. That makes the expansion privatized in a sense, but it’s not quite the same as Arkansas or Iowa. Michigan is another state under unified Republican control that’s expanding Medicaid solely through managed-care companies.

Privatized managed care is by no means rare. By 2015, some 75 percent of Medicaid enrollees are expected to enroll in a managed-care program, according to Avalere Health, a consulting firm. Many of those firms are private, nonprofit organizations.

The Corbett administration did, however, get some of its original requests. Like Iowa and Michigan, the state will be charging monthly premiums (of no more than two percent of income) to people earning above the federal poverty line. That part of the plan begins in 2016, a year after the January 2015 start date of the expansion. The state originally asked for premiums for people earning below the poverty line as well.

The state will also be able to charge people co-payments of $8 for improper use of emergency departments, down from the $10 originally requested. As other states have done, Pennsylvania is also including a program encouraging healthy behaviors such as annual checkups by offering to reduce premiums for enrollees in later years.

Since the U.S. Supreme Court effectively turned the Medicaid portion of President Obama’s health care overhaul optional, 26 other states and the District of Columbia have also expanded the program. Among them, five are under total Republican control, including Pennsylvania. Indiana and Wyoming are among the most-talked-about conservative states that are also actively pursuing expansion.

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