Don’t Call PA's Proposed Medicaid Plan an ‘Expansion’

Pennsylvania Governor Tom Corbett (R) Under the Affordable Care Act, states are encouraged to expand access to Medicaid coverage, with the federal government picking up the tab through 2016 and then paying no less than 90 percent on a permanent basis.

Most of the 26 states that rejected the expansion are “more conservative states in the South, Midwest and northern Rocky Mountains that voted against Obama,” the Associated Press reports. Pennsylvania is a geographic and political outlier; rather than accept expansion like every state it borders, Gov. Corbett submitted a 97-page waiver requesting the federal government let the state use those funds to help uninsured and underinsured low-income residents purchase privatized Medicaid insurance plans. The proposal is clearly conditional: The state will accept the federal dollars, not if but “when” the federal government accepts its proposal, which includes requiring enrollees to pay monthly premiums—and lose coverage if they miss payments—as well as prove they are searching for full-time work. (The majority of people on Medicaid in Pennsylvania already work full-time or live with someone who works full-time.)

In short, it’s a Frankenstein plan. The state is calling it “Healthy PA,” which is a laudable goal, especially considering the state earned an overall health ranking of 29 in a recent nationwide analysis, and Philadelphia in particular is suffering a dire crisis in maternal and infant health.

Corbett is also calling his plan “reform,” sending a signal through the Obamacare fog to the conservative base that he’s still fighting the health-care law he unsuccessfully attempted to overturn while attorney general.

The word reform, however, connotes improvement, and almost across the board health policy experts say the plan is not actually going to improve access to health care for the working poor of Pennsylvania.

News outlets can’t seem to agree on what words to use when describing the policy. Some use the relatively value-free termalternative.” Other reports have used the phrases “hybrid Medicaid expansion,” “variation,” and “fake Medicaid expansion plan.” And some default to the “expansion” language since that it is, after all, what we’re talking about. Or it was what we were talking about initially.

Advocates for low-income Pennsylvanians, however, say the most accurate term is “Medicaid cuts.”

“It’s not so much Medicaid expansion but Medicaid cuts,” said Kristin Dama, a staff attorney at Community Legal Services (CLS) of Philadelphia, a nonprofit that offers legal help to low-income clients.

“Pennsylvania is one of the first states, if not the first, to take the Medicaid expansion that’s supposed to be an expansion and use it, and use the language of expansion, as a vehicle for retraction of coverage,” she told RH Reality Check. Dama describes proposed benefit cuts to existing Medicaid enrollees as “significant and profound.”

Under the current Medicaid plan, radiology, lab work, in-patient hospital care, “durable medical equipment and supplies,” in-patient psychiatric hospital stays, and in-patient drug and alcohol stays have no spending limit. Under the proposed plans, these services have spending caps, according to an analysis provided by CLS.

The spending limits are staggered on a two-tier system of “low-risk” and “high-risk.” For example, a new spending limit on lab work in the new low-risk plan would be $250 per year, while the new limit for current Medicaid enrollees rolled into the high-risk plan would be $350 per year.

The state’s current Medicaid program covers 2.2 million people—1.1 million children, 379,000 parents, 250,000 seniors, 515,000 people with disabilities, and 72,000 chronically ill adults—according to the Pennsylvania Budget & Policy Center, which has called the cuts “severe.”

From the group’s analysis: “It seems clear that the Corbett administration is using the Medicaid expansion as leverage to press for significant reductions to the health care program that has served the state’s most vulnerable citizens for more than 50 years.”

In addition to capping benefits, Healthy PA retracts Medicaid coverage by installing obstacles such as monthly premiums and a work-search requirement. With some exceptions, the plan proposes premiums for people earning more than 50 percent of the federal poverty line—even though federal officials rejected a similar proposal in Iowa.

“The bigger issue in calling it an ‘expansion’ is that it is not a viable proposal to expand Medicaid, because it violates Medicaid law for the new beneficiaries and puts up so many roadblocks to coverage that it wouldn’t work,” said Joan Alker, executive director of the Center for Children and Families at the Georgetown Health Policy Institute. “And while he is in the neighborhood, the governor is cutting benefits for current eligibles.”

It’s not just policy experts saying not to call it an expansion. From an eight-page review of the plan published by the Department of Public Welfare: “This would not be an expansion of Medicaid.”

In short, Healthy PA would extend some coverage to Pennsylvanians in the gap, but it doesn’t expand the Medicaid program, and it would reduce benefits of current enrollees.

In the improbable case of the plan being passed as proposed, the implementation wish-date is 2015. In the meantime, how many people are left hanging in the gap? More than half a million. They earn too much money to qualify for current Medicaid (for parents, that equates to more than 23 percent of the federal poverty line), but not enough to receive a tax subsidy to purchase insurance on the exchange (above 100 percent of the federal poverty line).

An example provided in an analysis published by the Pennsylvania Health Law Project and Georgetown University Health Policy Institute Center for Children and Families illuminates the absurdity of this gap: Parents in a family of four with a household income of $75,000 per year will receive financial support to buy health insurance, but the same size family with a household income of $23,000 will receive no financial support.

The proposal is currently in the feedback phase. Open hearings are scheduled around the state through next week.

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