New Castle News

June 13, 2013

State exploring insurance vs. Medicaid

John Finnerty
New Castle News

NEW CASTLE — Officials in the Corbett administration said Pennsylvania is exploring whether the state could use federal dollars to move uninsured working poor people into the insurance exchanges created by Obamacare rather than adding them to Medicaid rolls.

The idea is one part of the “flexibility” that officials in the Corbett administration have used to hint at their efforts to tailor Medicaid expansion.

The exchanges created by the Affordable Care Act are intended to create a marketplace for private insurance providers to offer low-cost insurance.

The Affordable Care Act also includes funding to help states use Medicaid to expand health care coverage to those earning up to 138 percent of the federal poverty level. High-ranking officials in the Corbett administration said the state is pushing to see if those dollars can be used to pay for insurance in the exchanges because adding them directly into the state’s Medical Assistance program would be too costly.

Gov. Tom Corbett is unwilling to agree to expand Medicaid if the federal government doesn’t provide the state with the freedom to make “substantive reform” to absorb the additional 500,000 to 800,000 people, said Jen Branstetter, Corbett’s policy director.

The disclosure comes as Democrats and other proponents of Medicaid expansion have turned up the heat as the Legislature debates the 2013-14 budget.

Democrats tried to get a floor vote on Medicaid expansion as part of the budget debate in the state House. Their efforts were foiled by Speaker Sam Smith, who determined that the amendment calling for Medicaid expansion would violate House rules. A motion to suspend the rules to consider the question of Medicaid expansion was voted down.

“We are going to put them into a very unsustainable system,” Branstetter said. Other reforms that the Corbett administration would like to bake into Medicaid expansion include things like requiring recipients to make co-payments and insisting that those on Medicaid take advantage of job training if they are unemployed, she said.

There are already 2.2 million people enrolled in Medical Assistance in Pennsylvania and the program’s costs consume 73 percent of the Department of Public Welfare’s spending and 27 percent of the state’s total spending.

The federal government is insisting on a “one-size-fits-all approach that’s not going to work in Pennsylvania,” Branstetter said.

The notion of using the exchanges to cope with Medicaid expansion may be hamstrung by federal requirements, said Todd Shamash, deputy chief of staff.

Shamash said that the new Medicaid recipients must get the same services as those already enrolled in the program, so if the state tries to use the exchanges, the insurance must offer the same coverage as Pennsylvania’s Medical Assistance. The administration officials identified 22 types of services that are federally-required for Medical Assistance and another 29 services that were added, specifically in Pennsylvania. When the state accepted stimulus dollars, the state also agreed that it would not drop any of its existing Medicaid services, Shamash said.

The Corbett administration will not seek a waiver from the federal government until there is some indication from Washington that the waiver would be accepted, Branstetter said.

But proponents for move said the policy debate ignores the real-world need for Medicaid expansion.

Dozens of people rallied on the steps of the Capitol Wednesday for a “Lives on the Line” protest. The event was intended to shed light on the stories of the uninsured who need better access to health care, said one of the organizers, Antoinette Kraus, of the Pennsylvania Health Access Network.

Rose Yanko was among those who made the trek to Harrisburg. She said that as an unemployed person with liver disease, she has been told her condition is too serious for the local free clinic, but is not yet bad enough to qualify for assistance.

“As it is, my medical bills are piling up from doctor visits and biopsies. It’s so overwhelming, that I am starting to ignore those bills,” she said. “It’s not a solution, but I don’t know what else to do.”

P.J. McGill of the Pennsylvania AARP attended the event and said the organization supports Medicaid expansion.