Feds Approve Pennsylvania’s Medicaid ‘Expansion,’ But Concerns Remain (Updated)

While pleased that they may no longer have to refer to Pennsylvania as “the island of the uninsured,” advocates still have serious concerns with the Healthy PA plan.

While pleased that they may no longer have to refer to Pennsylvania as “the island of the uninsured,” advocates still have serious concerns with the Healthy PA plan. Shutterstock

Update and Clarification, September 4, 2014: The initial Healthy PA proposal eliminated podiatry, optometry, and chiropractic services. In April, after facing criticism, state officials suggested those services may not be cut out of the final plan. The approved waiver does not address these specific services, leaving many advocates assuming these services will still be eliminated. With the final details of Healthy PA still under negotiation, it is not entirely clear if these services will be eliminated or modified. A CMS representative referred Rewire to the state Department of Public Welfare, which has not yet responded.

Federal regulators approved “much of” Healthy PA, Pennsylvania Gov. Tom Corbett’s alternative to Medicaid expansion plan. If implemented, the plan will extend health insurance coverage to as many as 600,000 of the state’s working poor by next year.

While pleased that they may no longer have to refer to Pennsylvania as “the island of the uninsured,” advocates still have serious concerns with the plan.

Though people stuck in the gap created by Gov. Corbett’s refusal to expand Medicaid would finally gain coverage, Healthy PA slashes current benefits.

The federal government and the state are still negotiating the severity of the cuts. So far, of the 24 waivers submitted by Pennsylvania’s Department of Public Welfare, only four were approved. Some of the rejected provisions include a mandatory work-search requirement and punitive lockout periods for neglecting to pay premiums on time.

“[Centers for Medicare & Medicaid Services] told advocates yesterday that they have agreed on a framework for the cuts,” attorney Kristen Dama of Community Legal Services in Philadelphia told Rewire.

The basic “framework” for Healthy PA is to divide enrollees into high-risk and low-risk groups. The high-risk group will cover people with disabilities, seniors, and pregnant people. Everyone else will be rolled into the low-risk group.

The exact standards for how to categorize applicants—for example, what constitutes a disability severe enough to qualify for the high-risk group—is still unclear.

While the high-risk group will theoretically be held to higher standards than the low-risk group, new limitations and eliminations of services will affect everyone on Medicaid.

There will be new caps on lab fees and radiology services such as MRIs, CAT scans, and X-rays. The new plan eliminates chiropractic services, podiatry and optometry visits; these cuts will disproportionately affect diabetics.

Nine percent of Pennsylvania’s adult population has been diagnosed with the disease, which is the 7th leading cause of death in the state. There will also be limits on medical equipment. Subsidies for “durable medical equipment,” for example, could be reduced to $1,000 per year for Medicaid recipients rolled into the low-risk group.

“[We’re] really paring back benefits so that people are going to have to wait until they’re very, very sick [to gain services],” Dama said. “What we’re doing is really deviating from the trend of every other state.”

In addition to these cuts, the plan installs new barriers to coverage.

Healthy PA, in its current form, will charge some enrollees the highest Medicaid premiums of any state in the country, despite evidence “premiums and cost sharing can act as barriers to obtaining, maintaining and accessing health coverage and health care services, particularly for individuals with low-incomes and significant health care needs.”

Pennsylvania Health Access Network, a coalition of organizations advocating for health insurance access in the state, was succinct in their response to the news. Yesterday, the network published a blog post calling on citizens to sign a petition: “As a condition of expanding health care for some, Governor Corbett is trying to take it away from others by pushing through drastic and dangerous cuts in benefits for current enrollees.”

It is not clear if Healthy PA will actually be implemented at all.

Gov. Corbett is facing re-election this fall, and his numbers have been “epically bad.” The latest Franklin & Marshall poll shows Corbett capturing just 24 percent of the vote.

During spring’s primary election, Democratic challenger Tom Wolf promised that if elected, he would expand Medicaid which, at the time, meant the straightforward way, like New Jersey and all other surrounding states—an option advocates believe will be better for the working poor.

However, now that Healthy PA is approved, Wolf’s ability to go this route if elected will depend on when the state signs new contracts with providers under the provisions of Healthy PA.

Pennsylvania remains in an inverse situation where those who need the most financial help obtaining health insurance are the least qualified to obtain it. For example, a Pennsylvania family of four earning $45,000 a year qualifies for a tax subsidy toward health insurance, but a family of four earning $9,000 does not.

As of August, 61 percent of voters believe that Pennsylvania is “off on the wrong track.”