HARRISBURG - The Corbett administration on Wednesday submitted a softer version of its Medicaid proposal that restores some benefits, but is still viewed by analysts as the most extreme state plan to expand coverage under the Affordable Care Act.
The state seeks to use federal Medicaid dollars to subsidize commercial insurance for hundreds of thousands of uninsured Pennsylvanians. Just two other states have won approval for the type of alternative coverage plans Gov. Corbett wants to pursue.
The new waiver application delays until 2016 controversial changes that would apply to all able- bodied Medicaid recipients - specifically monthly premium payments and work search requirements - and lifts some limits on coverage proposed in its draft application released late last year.
"Healthy Pennsylvania is vital to providing a much needed safety net for the people that need it most. However, we want to make sure Medicaid remains a transitional benefit," said Gov. Corbett in a statement.
An opponent of Obamacare, Corbett resisted expanding the existing Medicaid program as 25 other states, including New Jersey, have done.
Then in September he announced he would submit a plan similar to the one that would soon be approved for Arkansas (and since then Iowa) to use Medicaid funds to pay private insurers to cover the poorest uninsured.
At the time critics charged the plan was overly burdensome for low-income people and contained mandates - like the work search - that have never been approved by the federal government.
Pennsylvania would also be the only state to change benefits for recipients of the current Medicaid program.
The revisions announced Wednesday left many advocates unimpressed. "Healthy PA still includes unnecessary, dangerous cuts that will hurt seniors, people with disabilities, and pregnant women who currently rely on Medicaid coverage," said Antoinette Kraus, director of the Pennsylvania Health Access Network.
Department of Public Welfare Secretary Beverly Mackereth said the administration made a number of changes in response to testimony at hearings across the state and some 1,000 comments that were submitted.
As a result, limits on primary care doctor visits were lifted. Limits on lab testing, mental health and drug and alcohol services, were reduced, and monthly premium payments for those making above 100 percent of the federal poverty level ($23,850 for a family of four) would not start until the second year - and, for those between 50 percent and 100 percent, they would be dropped entirely for now.
But the administration is sticking to its most controversial proposal: a requirement for work-search or job training.
"We believe it's important," said Mackereth. "Encouraging employment ties in strongly to good health outcomes."
She said the goal is to remove people from public assistance. "We don't want people to remain on government-funded health insurance. We're providing tools for people to use."
Acceptance of a complete application starts the clock on a 30-day federal comment period and an additional 15-day period for comment review. A decision could not come from the federal government before April; there is no deadline.
If the application is approved, coverage for the uninsured would start Jan. 1, 2015. Most elements of the proposal do not need state legislative approval, Mackereth said.
Under the health law, the federal government covers 100 percent of the cost of enrolling the uninsured in Medicaid starting in 2014, and drops to no less than 90 percent after 2016.
The delay will cost Pennsylvania hundreds of millions if not billions in Medicaid dollars this year and leaves an estimated 500,000 low income residents without health coverage for the first year of the program.
Early reaction to the proposal from the health-care community seemed to fall into two camps.
Policy analysts and advocates for the poor said that the plan, while improved, still went further than what any other state has sought. Some said it was unlikely to get approved.
"It is pretty much more of the same," said Richard Weishaupt, senior attorney for Community Legal Services of Philadelphia.
Some organizations that represent specific groups with a stake in the outcome - the state hospital association, state medical society, and the association for community health centers - gave cautious if not strong support for the revised plan.
"We are pleased that the administration has moved forward with actual submission of the waiver," said Curt Schroder, regional executive for the Delaware Valley Healthcare Council, which represents hospitals.
He noted that the submitted plan includes "presumptive" Medicaid eligibility for new applicants who come to the hospital - a process used in many states that allows for preliminary immediate coverage based on information given on site.
Community health centers, which serve many low-income and uninsured patients and were not part of the required coverage network in the original plan, are now back in.
"We put up some unintended barriers," Mackereth conceded. "These clinics are the safety net for their communities. And we wanted to ensure they remain as the safety net."
Analysts predicted that, for the federal government, which must approve the program, among the biggest hurdles will be Corbett's plan to change benefits for current Medicaid recipients, not just the Medicaid expansion population whose eligibility was included in the federal law for the first time.
And the work-search requirement - a provision that has been renamed "encouraging employment" - faces the challenge of not being part of the goal of the Medicaid statute, which focuses specifically on health, said MaryBeth Musumeci, associate director of the Kaiser Commission on Medicaid and the Uninsured.
Joan Alker, an expert on Medicaid waivers at Georgetown University's Health Policy Institute, said flatly that the work search requirement is something that Washington "will not and cannot approve," based on how the statute is written.
Others pointed out that several benefits now covered by Medicaid would be cut.
While children's benefits would not be affected, said Kathleen Noonan, an attorney and codirector of the PolicyLab at Children's Hospital of Philadelphia, adults would lose services. "Optometry is not covered. Podiatry is not covered. Chiropracter is not covered," she said.
"For those that don't like the framework" - using federal Medicaid funds to subsidize premiums for commercial insurance, as well as changes to the current Medicaid program - "I don't think it is going to carry the day," Noonan said.