WASHINGTON -- Pennsylvania agreed to expand Medicaid under the Affordable Care Act on Thursday, joining 26 states and the District of Columbia.
Federal regulators accepted a modified proposal from Gov. Tom Corbett (R) that will offer an estimated 500,000 low-income individuals subsidies to purchase private insurance. The plan allows some low-income individuals to be charged premiums for coverage, and permits the number of available benefit plans to be reduced from 14 to two -- a "high-risk" option and "low-risk" options -- according to the Pittsburgh Post-Gazette.
Centers for Medicare and Medicaid Services Administrator Marilyn B. Tavenner lauded the agreement in a statement, and urged other states to expand Medicaid as well. Corbett is only the 9th Republican governor to sign on.
“Like we are doing in Pennsylvania, HHS and CMS are committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals," Tavenner said. "But, unfortunately, millions of Americans are still without Medicaid coverage because their state has yet to act."
The Republican governor initially sought to require those seeking coverage to be actively searching for jobs, a controversial provision that angered Democrats. Instead, the state will fund and administer a voluntary program that will offer job training and placement services for Pennsylvanians who decide to participate.
More on the details of the agreement, via CMS:
• With this approval and associated agreements, Pennsylvania will become the 28th state, including the District of Columbia, to adopt the Affordable Care Act’s Medicaid expansion. An estimated 500,000 individuals will gain coverage over the life of the demonstration, according to the Pennsylvania.
• Coverage starts in January 2015. No premiums are required for the first year. Premiums begin in 2016 for adults with incomes over 100 percent of the federal poverty level. Premiums must not exceed 2 percent of household income, and no premiums will be charged those whose incomes are below the poverty level.
• Individuals who fail to pay premiums will lose coverage after a required grace period, but they may subsequently reenroll without a waiting period. Beneficiaries who show they are taking action to improve their health, such as by getting regular preventive care check-ups, will pay less for their coverage and care.
• Pennsylvania will use managed care health plans to provide coverage for beneficiaries just as it does now in its current statewide managed care program, known as Health Choices. Federal managed care rules have not been waived, although when commercial standards are at least as robust as the federal rules, Pennsylvania can rely on the commercial standards as they contract with health plans.
• The state will provide benefits that fully comport with federal law; no benefits waiver has been granted. CMS and the state have reached agreement on the overall benefits approach, pending final submission of documents by the state consistent with the agreement that has been reached. Under the law, states have the flexibility to design multiple benefit plans, and Pennsylvania has chosen to establish “high” and a “low” risk benefit plans. People who are medically frail will be enrolled in the high risk plan. Both benefit plans, which will be effectuated through state plan amendments pursuant to agreements reached with the Commonwealth, will meet all applicable federal standards.
• Work requirements and incentives are not approved as part of this waiver. The state plans to fund and administer a separate program to link people gaining coverage under the waiver to job training and placement services for those who choose to participate. Health coverage will not be affected.
• The expansion is paid for with 100 percent federal funds through 2016. Federal funding rates gradually decline beginning in 2017, but never fall below 90 percent of costs.