A Step in the Right Direction

September 4, 2014

Governor Tom Corbett has made a big step in the right direction with approval of Pennsylvania’s Medicaid expansion, dubbed Healthy Pennsylvania (PA). Estimates suggest between 300,000 to 500,000 individuals will now be eligible for health insurance. Since Healthy PA is not traditional Medicaid expansion, it had to be approved by the Centers for Medicare and Medicaid (CMS) through a waiver process. The program uses a “premium assistance” approach similar to the Medicaid expansions of Arkansas and Iowa, which both use Medicaid funds to pay beneficiaries’ private insurance premiums. Pennsylvania would also be the 9th state led by a Republican Governor to expand Medicaid, joining the likes of New Jersey, Arizona, Michigan, Iowa, Nevada, New Mexico, Ohio and North Dakota.

Adult Basic Cuts

The expansion will certainly be a relief for individuals that once had low-cost health insurance through Pennsylvania’s Adult Basic program, which Corbett cut in 2011. Adult Basic was a fully state-subsidized affordable health insurance program for low-income workers.  The program provided basic health care for people with incomes up to 200% of federal poverty level (FPL), between the ages of 19-65. It was introduced back in 2001 and heralded as an innovative state approach to providing health insurance for the working poor. However, Corbett discontinued the program when an estimated 40,000 individuals were enrolled and 384,144 waitlisted.

Since the cut, those scrambling to find affordable health insurance had few options. About a quarter of the 40,000 were siphoned to Blue Cross’ Special Care program; however, monthly premiums started at about $150, a big increase from Adult Basic’s $36 premium. The plan also only covered four primary care visits a year. Individuals diagnosed with multiple chronic diseases could easily exceed the annual visits cap in a couple of months, much less an entire year. Consequently, the Special Care program was not a feasible option, financially or practically, for many ex – Adult Basic enrollees.

Private insurance and Medicaid were also not options for most who had been in the program. Private insurance’s high premiums and disqualification of individuals with pre-existing conditions excluded many.  Medicaid’s financial eligibility rules and requirement of dependents barred many from the program; only about 4% qualified for Medicaid.

Better Things on the Horizon

Finally, a little over two years after the cut of Adult Basic, much relief came when the federally-facilitated health insurance marketplace was launched. Individuals with incomes between 138% FPL and 400% FPL, including those formerly enrolled in Adult Basic, could obtain affordable insurance. Overall, 300,000 Pennsylvanians’ chose a plan from the exchange. However, there was still a “coverage gap” for individuals below this income level and did not qualify for Medicaid.

Healthy PA, Not Perfect…but a Very Welcome Step Forward!

Now, after a year of negotiations with CMS, (and conspicuously announced at a time when Corbett is trailing by sizable double-digit deficit in his re-election bid), a tweaked Medicaid expansion has been approved that will finally fill in the coverage gap.

Here are some of the specifics:

  • Individuals over 100% FPL will be enrolled in private managed care plans. In traditional Medicaid expansion, individuals are enrolled in Medicaid plans up to 138% of FPL.
  • Starting in 2016, individuals between 100% and 138% FPL will have to pay a premium, no greater than 2% of income (approximately $19 to $27) based on a sliding fee scale. There will be no premiums below 100% of FPL.
  • There is a healthy behavior incentive program. The program allows for individuals that participate in healthy behaviors or work-related activities, such as receiving an annual physical or job training and work search, to have reduced premiums or cost-sharing amounts.
  • Individuals who do not pay their premiums for three months will be dropped from Medicaid, but can re-enroll immediately. The three months of premiums not paid by an individual could be subject to collection by the state, as it is debt owed.

Unfortunately some benefits are set to be cut. Pennsylvania Health Access Network is working on a petition to urge the Governor not to cut coverage for visits to the eye doctor, chiropractor and podiatrist. There would also be restrictions on lab work, radiology and hospital care, as well as cost limits for wheelchairs and diabetic supplies.

Overall, Pennsylvania’s workers have struggled in obtaining affordable, quality health insurance coverage. Adult Basic, for over a decade, assisted many. The decision to expand Medicaid will only serve to strengthen the Commonwealth by improving the health, financial security, and overall quality of life for hundreds of thousands of Pennsylvanians.