HARRISBURG Signaling progress in its negotiations with the federal government, the Corbett administration said Thursday that it expected by January to launch its plan to provide health-care coverage for more than 500,000 low-income Pennsylvanians who lack insurance.
Officials said they were so confident that the program would be up and running by Jan. 1 that they had decided to start soliciting contract proposals from private insurers. They hope to name at least two insurers for each of nine regions statewide by Aug. 1.
Jennifer Branstetter, Gov. Corbett's secretary of planning and policy, said that even though the federal government has yet to sign off on the plan, "the negotiations are in a good spot."
The timing was surprising to some. The development comes a month after Corbett expressed deep frustration over the talks with federal officials on how to use Medicaid expansion funds - an outgrowth of the Affordable Care Act - and threatened to pull the plug on his "Healthy PA" plan.
And observers inside and outside the insurance industry said it would be very difficult for insurers to submit detailed proposals by a June 10 deadline for a far-reaching plan whose details have yet to be approved.
"The only thing they are going to get between now and then is a statement of intent," said one industry health policy expert who, like some other insurance company officials, said he was not authorized to publicly comment on the developments.
That would nevertheless give the state a head start, he said, and could also create pressure on the Obama administration to expedite the approval process.
The request for proposals, posted Thursday on the state's solicitations website, runs 23 pages, with an additional 100 or so pages of attachments - short for documents of this kind.
The proposal, which has drawn criticism from some low-income health-care advocates and Democrats, would use federal Medicaid dollars to pay private insurers for coverage.
Like other states, such as Arkansas, that have chosen to pursue a private option, Pennsylvania must first get a waiver of federal law from the Department of Health and Human Services.
The Pennsylvania plan goes further than existing state plans by requiring many new and existing recipients to pay monthly premiums of between $25 and $35, and reducing them for healthy behaviors and engaging in job searches. Both requirements would begin in the second year, 2016.
Judy Solomon, vice president for health policy at the Center on Budget and Policy Priorities in Washington, said the proposal appears to be very different from that of Arkansas, which is using Medicaid money to buy existing coverage on the federal Marketplace for its low-income population. Pennsylvania's solicitation requests new plans, and is essentially open to any licensed insurer, she said.
"Is that a good thing or is that a bad thing? I don't know," she said. "But it is surprising to me."
The five managed-care companies that currently provide coverage to Southeastern Pennsylvania's Medicaid population do not have plans in the federal marketplace. Those that responded Thursday to questions about their interest in the proposal released noncommittal statements. Aetna, for instance, said it "will fully evaluate this opportunity."
Most of the 26 states (plus the District of Columbia) that accepted full Medicaid expansion under the health law started offering coverage in January, with the federal government footing the bill until 2016.
Critics say Pennsylvania's delay is costing the state billions of dollars that could be used to fund health care for the uninsured.
If Pennsylvania launches its plan next January, it will have lost a year of full federal coverage. The federal contribution drops to 90 percent after the third year.
In addition to the premiums and financial incentives, some benefits and services would be reduced or eliminated for the current 2.2 million Medicaid recipients. Among the services that would no longer be covered are chiropractic care, podiatry, optometry, and some transportation.
Corbett administration officials say they are still negotiating on those issues but said they could not indicate when they might get the go-ahead from Washington.
"We hope the full waiver will be approved, but if we have to modify it, we will," said Branstetter. "We share the same goal to increase coverage, and that can't happen till the waiver's approved."