Update on Pennsylvania Medicaid April 2014

Governor Corbett and his staff hosted the final public hearing on his new Medicaid plan in January. State Department of Welfare Secretary Bev Mackereth made a pitch on January 7th at the Blair County Convention Center for the Medicaid reform portion of the Healthy PA plan. The hearing gave an opportunity for people on both sides of the plan to be heard—fourteen people testified at the hearing, both praising and objecting to the governor’s plans. The Governor’s plan aims to reduce Medicaid’s massive share of the state budget and close insurance coverage gaps for those with the greatest needs.The State proposed this plan as an alternative to the Federal Medicaid expansion program, which was slated to go into effect in early 2014.

The Federal Plan

The federal offer would bring Medicaid coverage to everyone up to 133 percent of the federal poverty level, filling gaps in the state’s current irregular, but collectively generous, eligibility requirements. The federal plan would also add about 400,000 people to the Medicare rolls, with all additional costs covered by the feds for three years and 90 percent thereafter. Mackereth spoke against the federal plan, saying that it was unsustainable. She noted that the program, which includes one in six people, represents 27 percent of the state’s total budget at $8 billion a year. It grows by $300 million every year and poses a threat to other key budget categories like education and transportation.

The Pennsylvania Plan 

Mackereth discussed the Governor’s plan which would increase access to health care for 500,000 people, ensure that their benefits match their needs, and also try and push users to take more personal responsibility. It would reduce the fourteen current Medicaid plans to two—one for high-risk adult patients and one for low-risk. People aged 21 to 64 who earn up to 1.3 times the level of poverty and are not eligible for Medicaid would be placed in a private insurance program that fulfills the requirements of the Affordable Care Act. The plan would also require some users to help pay for the care and look for work to be eligible for it. In addition, those who developed healthy habits and complied with requirements would benefit from reductions in premiums.

Plan Too Complex? 

Despite the proposed benefits, many object to the governor’s plan. The state proposal is “overly complex,” creates “new and burdensome bureaucratic hoops,” delays insurance coverage for a year for 400,000 people, cuts coverage for seniors, people with disabilities and pregnant women, and imposes unnecessary government mandates, according to the Cover the Commonwealth Coalition, which brought a sizeable contingent to the hearing. Many argue the Federal plan is simpler to implement and a better choice in the long run.

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