Pennsylvania Accepts Partial Medicaid Expansion  

The fall election campaign traditionally kicks off on Labor Day and does not end until November, but Pennsylvanians received an election bonus early.

Last Thursday, Governor Corbett announced that Pennsylvania would agree to a modified expansion of Medicaid.

Corbett had developed a Medicaid expansion plan, proffered in February, which was immediately rejected by the U.S. Department of Health and Human Services (HHS) because it included a work requirement, lowered income requirements, and other pieces that stood in direct opposition to both The Affordable Care Act (ACA) as well as the intention of the legislation.

The House Appropriations Committee’s chairman, Joe Markosek (D., Allegheny), said that the federal agency rejected many of the most controversial provisions in Corbett’s February proposal, such as high premiums for patients, lockout periods of as much as nine months for enrollees unable to pay their premiums, and linking health coverage to job and work-search requirements.

The original Corbett plan has been modified after lengthy negotiations with HHS. The bottom line is that up to 500,000 low income residents will be eligible for one of two health care plans defined by the state at premiums that cannot exceed 2% of their gross income. The plans will also have some deductibles and co-pays. For an interim period as private insurers ramp up to offer the coverage, eligible Pennsylvanians will be allowed to utilize the current Medicaid program.

Those people, currently in the gap between living between the poverty level and up to 138% of the poverty level, were excluded from the ACA because Corbett rejected the Medicaid expansion. Thus, they were not allowed to receive Medicaid, nor could they receive a subsidy to afford premiums under the ACA program.

Inside and outside of Pennsylvania the attention given is less than this event deserves. The New York Times and The Wall Street Journal covered the event lightly on Thursday, and it was picked up in a number of political and healthcare blogs. One comprehensive blog post was published by The Washington Post. Then the story died.

Pennsylvania was one of the Republican states that went to court to challenge the constitutionality of the ACA, and Governor Corbett’s opposition fit well with his image of himself as a thrifty, little-government-is-best Republican.

As is often the case with this perspective, it actually cost Pennsylvania more in Medicaid costs because had Corbett taken the clean expansion initially, even while refusing to accept the rest of the ACA, the Federal government would have covered 100% of the costs this year and next, and then a decreasing amount never below 90% of the cost. Instead, Corbett’s opposition cost Pennsylvania hundreds of millions of dollars in direct costs related to the Medicaid expansion. Further, the state has lost close to $1.7 billion in jobs and infrastructure had the ACA been accepted and state exchange launched.

Corbett faces an uphill campaign for reelection, with the latest polls showing him down by 25 points. So we can conclude that accepting the Medicaid expansion is judged by the Governor’s campaign to be politically popular. Hopefully, this will be a bellwether for events in states that are deeper red than Pennsylvania.

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