Pennsylvania may finally expand its Medicaid program under the Affordable Care Act but not the way the drafters of the law had envisioned. And not exactly the way Governor Corbett envisioned it either.  Some aspects of the Governor's "Healthy Pennsylvania" plan received federal approval this week. The plan expands eligibility for Medicaid but makes changes to the program by providing coverage through private insurance companies, requiring that some beneficiaries pay premiums, and consolidating (perhaps cutting) some services for those already covered.

The approval is a compromise, and like many compromises, it will have its supporters and detractors.  On the one hand, the plan no longer ties Medicaid coverage to work search requirements that were administratively complex and no longer requires premiums from people making less than the federal poverty limit (that's $11,670 for a single person). On the other hand, it does allow Pennsylvania to charge people making more than the federal poverty limit premiums in 2016 in lieu of usual Medicaid copayments.  And it means that newly eligible people (except for the medically complex/frail) will choose among state-approved commercial plans (with a choice of at least two in each region), instead of the present HealthChoices managed care plans.

We can argue about the relative merits of Pennsylvania's plan, but the important point is that the state should move as quickly as possible to put it in place now that it has been approved.  Coverage could start as early as January 1, 2015. Pennsylvania has already "lost" a year of full federal funding for Medicaid expansion, and nearly 300,000 people, all making less than 138% of the federal poverty level (that's $16,105 yearly for a single person) have remained uninsured and in the "coverage gap".

In 2014, 2015, and 2016, the federal government is paying 100% of the costs of expanding Medicaid, and 90% thereafter. The one-year delay in expanding Medicaid has already cost the state dearly.  According to the Urban Institute, Pennsylvania lost more than $3 Billion in federal funding in 2014.

In other words, Pennsylvania has spent (that is, foregone) thousands of dollars to keep some of the poorest Pennsylvanians uninsured in 2014. According to the Kaiser Family Foundation, 281,290 people remain uninsured who would have otherwise qualified for Medicaid.  They represent 25% of all uninsured adults under 65, and  88% of all uninsured adults under 65 below the poverty level.

Pennsylvania is set to become the 27th state expand its Medicaid program. Now the challenge will be to enroll as many eligible people as possible.  Arkansas, among other states,  has achieved high rates of enrollment through a "fast track" process of direct outreach to people already receiving SNAP (Supplemental Nutrition Assistance Program) benefits.

It has taken a year to reach this compromise in Pennsylvania.  Few will see it as the best approach.  But for the people whose coverage is at stake, it's better late than never.


Editor's Note: Cross-Posted on the Voices@LDI blog of the Leonard Davis Institute of Health Economics of the University of Pennsylvania.


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