Federal regulators approve Gov. Corbett's 'Healthy PA' Medicaid overhaul

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HARRISBURG - Pennsylvania's working poor could start receiving subsidized health insurance as early as Jan. 1, now that the federal government has approved the state's proposed Medicaid overhaul.

Federal regulators have approved the bulk of Gov. Tom Corbett's ' Healthy PA ' plan, the state confirmed this afternoon. Enrollment in what's being called the 'Healthy PA Private Coverage Option' will begin Dec. 1, 2014, according to the state.

Mr. Corbett's plan, submitted to the federal government in February, would not directly expand the state's Medicaid program, but would offer federal subsidies to about 500,000 low-income Pennsylvanians to purchase private insurance.

'From the beginning, I said we needed a plan that was created in Pennsylvania for Pennsylvania - a plan that would allow us to reform a financially unsustainable Medicaid program and increase access to health care for eligible individuals through the private market,' Mr. Corbett said in a prepared statement.

Health PA would also make sweeping and somewhat controversial changes to the existing Medicaid program, such as allowing some low-income individuals to be charged premiums for coverage and consolidating most existing benefit plans.

The governor's proposal to reducing the number of Medicaid plans from 14 to two (a high-risk and low-risk plan) will be permitted, as will allowing premiums for people earning above 100 percent of the poverty level, starting in 2016.

The Republican governor had already agreed to back down from one of the most controversial aspects of the plan, agreeing to make a work search requirement he originally sought to impose into a voluntary pilot program. No other state imposes such a requirement for enrollment in its Medicaid program, and the state had acknowledged it would likely to be difficult to get federal regulators to agree to it.

The state had also agreed to not cut the Medical Assistance for Workers with Disabilities program, which covers 33,000 low and middle-income Pennsylvanians with disabilities.

'Health care is not a one-size-fits-all issue; the governor's Healthy PA plan meets the needs of Pennsylvania,' Pennsylvania Department of Public Welfare Secretary Beverly Mackereth said in a prepared statement.

'Gov. Corbett is the first governor to tackle much-needed Medicaid reforms since the program's creation, with the goal of protecting Pennsylvania taxpayers and looking ahead to maintain a safety net for those who most need public assistance.'

Medicaid eats up nearly 30 percent of the state's general fund expenditures. The budget approved by state lawmakers in June and signed by the governor in July assumes $125 million in Medicaid-related savings from Healthy PA.

Medicaid expansion was a key part of President Barack Obama's 2010 health care overhaul, and was intended to help insure 17 million Americans who were previously unable to obtain or afford health insurance. The federal government committed to pay nearly $1 trillion to help states pay for the expansion.

But two years later, a U.S. Supreme Court decision made the Medicaid expansion optional for states. Some states have opted not to take part in the expansion; others, such as Pennsylvania, are using the cash to revamp the original Medicaid model significantly, in a manner more palatable to the state's Republican Legislature and governor.

In Pennsylvania, Medicaid is currently available to only certain vulnerable and disabled populations. When expanded, the 'Healthy PA' program will be income-based, and anyone making below 138 percent of the federal poverty line could get Medicaid-style private coverage.

The governor's critics have said Healthy PA will create more barriers to care and cut benefits, while a straightforward expansion of the federal Medicaid program would have covered the uninsured sooner and with more comprehensive coverage. Mr. Corbett's gubernatorial opponent, Democrat Tom Wolf, has said he favors a Medicaid expansion.

The U.S. Centers for Medicare & Medicaid Services, in its own statement, sought to paint the approval as a Medicaid expansion, saying Pennsylvania was the 28th state, including Washington, D.C., to accept the federal Medicaid subsidies.

'Like we are doing in Pennsylvania, [the U.S. Department of Health and Human Services] and CMS are committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals,' said CMS Administrator Marilyn Tavenner. 'But, unfortunately, millions of Americans are still without Medicaid coverage because their state has yet to act.'

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Kate Giammarise: 717-787-4254 or kgiammarise@post-gazette.com or on Twitter @KateGiammarise.