Pennsylvania reaches deal to expand Medicaid to low-income earners

Pennsylvania became the 27th state to expand Medicaid guidelines in exchange for receiving federal dollars, after the US Department of Health and Human Services on Thursday approved the state's plan.

A half-million more low-income Pennsylvanians are in line to get federally funded health insurance after the U.S. Department of Health and Human Services on Thursday approved the state's plan to accept Medicaid expansion money under the landmark 2010 federal health care law.

Republican Gov. Tom Corbett's administration and the federal agency agreed to a plan that lets private insurers administer Medicaid-funded coverage that adheres to Medicaid's existing rules. The plan vastly expands a Medicaid program that already covers 2.2 million adults and children in Pennsylvania.

Enrollment in the plan, named Healthy Pennsylvania, is expected to begin Dec. 1 with coverage to start the following Jan. 1. With the agreement, Pennsylvania joins 26 other states and Washington, D.C., in opting for the Medicaid-funded expanded coverage.

Corbett was under pressure from hospitals, labor unions, the AARP and advocates for the poor to accept the Medicaid expansion money, which became available Jan. 1 of this year. They argued it would cover hundreds of thousands of low-income working adults.

The governor, a critic of President Barack Obama's signature health care law, initially refused to accept the federal money without changes to the Medicaid expansion as it was envisioned by the law. He proposed ways to make the Medicaid coverage more like private insurance, including waiving some of the program's permissive coverage rules. He ultimately made some concessions in the final agreement, as he faces a tough re-election bid this November.

Corbett faces Democratic challenger Tom Wolf, who criticized the governor for delaying the expansion of health care.

Corbett is the ninth Republican governor to agree to expand Medicaid guidelines in exchange for receiving federal dollars. Most of the 27 states in the program simply expanded the eligibility guidelines of their Medicaid programs on Jan. 1. Like Pennsylvania, a few states, including Arkansas, Iowa and Michigan, sought changes to the program.

The expansion will be paid for with 100 percent federal funds through 2016. Federal funding gradually declines beginning in 2017 to 90 percent of the cost. Still, Pennsylvania will save billions of dollars over the coming years by shifting tens of thousands of existing Medicaid enrollees onto the federal government's tab.

Under the approved plan, incentives will be offered to enrollees to lower their premiums. And while premiums and co-pays are relatively small, enrollees could be denied coverage or service if they fail to pay in a timely fashion.

"We're trying to show that by giving individuals personal responsibility in building in healthy behaviors that we're not just trying to do what we've always done," said Beverly Mackereth, Corbett's Department of Public Welfare secretary. "We're trying to build a program that changes behavior and allows people to benefit more from the health care that they're given."

But the U.S. Centers for Medicaid and Medicare Services said federal rules that apply to other private Medicaid providers will not be waived, although Pennsylvania can rely on commercial standards if they are at least as stringent as the federal rules. Private insurers already administer coverage for many of Pennsylvania's existingMedicaid enrollees.

Marilyn Tavenner, head of the Centers for Medicaid and Medicare Services, praised the Pennsylvania deal and said federal health officials are committed to working with states on innovative solutions. She also noted that millions more Americans are still without Medicaid coverage because their states have yet to embrace a Medicaid expansion.

Corbett's 124-page plan, submitted to federal officials in February, asked CMS to break new ground on Medicaid policy, including a first-of-its-kind work requirement for recipients to be eligible for Medicaid benefits under the expansion.

But his office ultimately backed off several of his proposals, including a request to make the Medicaid-funded coverage free of some of Medicaid's more permissive coverage rules. Before negotiations began in April, Corbett also dropped one of the more disputed conditions to require able-bodied, working-age Pennsylvanians to complete certain work-search activities to be eligible.

The program will now be voluntary, and enrollees can lower their premiums via a state plan by showing that they are working at least 20 hours a week or are engaged in skills training or certain job-searching activities.

Corbett's proposal covered the same population as the Medicaid expansion: working adults who make up to 133 percent of the federal poverty level, or about $15,500. Corbett administration officials say more than 600,000 more residents — primarily low-income childless, working adults — will be eligible for the coverage. About 50,000 are already enrolled in the existing Medicaid program, and administration officials say they cannot project how many ultimately will enroll.

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Yen and Associated Press writer Ricardo Alonso-Zaldivar contributed to this report from Washington, D.C.

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