Pennsylvania Medicaid Update: Governor Proposes New Way to Cover Low Income Residents

Governor Tom Corbett

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Tom Corbett has proposed to purchase private health insurance for low-income residents using federal Medicaid funds.

The governor of Pennsylvania, Tom Corbett, released details in early December of his proposal to use federal Medicaid funds to buy private health insurance for low-income residents. His plan is similar to others being considered by Republican Governors who oppose expanding Medicaid under President Obama’s health care law.

One such plan proposed in Arkansas was formally approved by the Obama administration in September. Similarly, Mr. Corbett’s plan would use federal funds available for expanding Medicaid under the Affordable Care Act to instead buy private coverage from the new online insurance market place for the expanded Medicaid population.

However, Corbett’s proposal differs more than the Arkansas plan from traditional Medicaid and may have a harder time winning federal approval. Under his plan, people with incomes greater than 50 percent of the poverty level (currently $15,415 for a household of one) would have to pay a “nominal” monthly premium, according to a draft of Mr. Corbett’s application for a federal waiver.

The premium is intended to encourage those covered “to make healthier choices, both in their daily lives and when making decisions about their health care,” according to the application. Premiums would be reduced if users paid on time and got an annual physical exam. Christine Cronkright, a spokeswoman for Mr. Corbett, explained that “The idea here is to encourage people to seek preventive care and develop a relationship with a primary care provider.”

Corbett also intends to restructure Medicaid for current beneficiaries. Under his plan, beneficiaries would be grouped based on their needs: most working-age adults in the standard program would be enrolled in a “low-risk” health plan with basic benefits, but people with more complex health problems would qualify for a “high-risk” plan with more benefits.

The outline of Corbett’s plan was announced in September but these additional details were provided on Friday 12/6. In the news release, he said the plan would cover more than 500,000 uninsured residents “in a fiscally sustainable manner.” The state plans to formally submit its application in early 2014 after holding public hearings around the state.

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