PA-Specific Plan Will Reform Medicaid, Protect Taxpayers and Increase Access to Private Market Coverage
Harrisburg – Governor Tom Corbett today made an historic announcement that the state has secured agreement with the federal government to implement the portion of his Healthy Pennsylvania plan that will improve and bring financial stability to the state’s Medicaid program so that the state can increase access to quality, affordable health care through the private insurance market.
“From the beginning, I said we needed a plan that was created in Pennsylvania for Pennsylvania − a plan that would allow us to reform a financially unsustainable Medicaid program and increase access to health care for eligible individuals through the private market,” Corbett said.
In order to make the necessary changes to the state’s health care system, the Corbett Administration requested over the past year a waiver and associated state plan amendments from the federal government, which were then modified based on a comprehensive public comment process across the state. Public input included seven public hearings and two webinars statewide with more than 1,000 attendees and 170 live testimonies. The waiver was officially submitted to the U.S. Department of Health and Human Services on Feb. 19.
“Health care is not a one-size-fits-all issue; the governor’s Healthy Pennsylvania plan meets the needs of Pennsylvania,” Pennsylvania Department of Public Welfare (DPW) Secretary Beverly Mackereth said. “Governor Corbett is the first governor to tackle much-needed Medicaid reforms since the program’s creation, with the goal of protecting Pennsylvania taxpayers and looking ahead to maintain a safety net for those who most need public assistance.”
The Healthy Pennsylvania agreement includes two parts: reforming the current Medicaid program and offering the Healthy PA Private Coverage Option (PCO) for eligible Pennsylvanians.
The Healthy Pennsylvania plan focuses on personal responsibility and healthy behaviors; aligning benefits to match health care needs; promoting financial independence through access to job training and employment resources; and increasing access to private, commercial coverage for eligible Pennsylvanians.
Medicaid costs account for 29 percent of the state’s general fund budget and have been growing at an average rate of 3 percent – more than $400 million – each year. Governor Corbett has been clear that he would not expand Medicaid because it is an unsustainable entitlement program. Instead, the Corbett Administration sought common-sense reforms to the Medicaid program.
As part of the approved waiver, the Healthy Pennsylvania PCO will be created to increase access to health care through the private, commercial market for more than 600,000 eligible Pennsylvanians. This will help to reduce bureaucracy by relying on commercial insurance carriers and offer more provider options to recipients. Currently, nine insurers have applied as providers of the Healthy Pennsylvania PCO, offering a minimum of two insurer options in each region of the state. Enrollment is expected to begin Dec. 1.
Healthy PA PCO and Medicaid Reform Innovations
Both components of the plan include these four innovations:
- Alignment with Private, Commercial Health Care Benefits:
The current Medicaid program will change from 14 benefit plans into “low risk” and “high risk” benefit packages that include essential health benefits and meet standards for mental health and drug and alcohol coverage uniformity. This change will better tailor health care benefits to the needs of the different populations served in the program.
A new, innovative commercial benefit plan will be offered under the Healthy PA PCO to the more than 600,000 eligible Pennsylvanians.
- Encouraging Employment:
The Encouraging Employment program will assist low-income, able bodied Pennsylvanians to improve overall health and well-being and move out of poverty. Pennsylvania is the first state to advance an incentivized employment program to reduce health care cost sharing.
- Cost Sharing:
To encourage personal responsibility, individuals enrolled in the Healthy PA PCO and Medicaid program will participate in cost sharing:
- Year One: Eligible individuals will pay the same Medicaid copayments that exist today.
- Year Two: Eligible individuals with incomes greater than 100 percent of the Federal Poverty Level (FPL), unless otherwise exempt, will be required to pay 2 percent of their income toward a monthly premium. Current copayments will be eliminated. An $8 copayment for non-emergency use of the emergency room will be introduced. Individuals who do not pay premiums for more than 90 days will be disenrolled, with limited exemptions from premiums for individuals meeting certain criteria.
- Cost-Sharing Reductions:
Individuals in the Healthy PA PCO and Medicaid program will have the opportunity to reduce their cost-sharing obligations by engaging in certain healthy behaviors.
Medicaid participants and Healthy PA PCO enrollees will be able to reduce their health care cost-sharing obligations through job training and work-related activities, with each participant receiving assistance to do so from a Healthy PA Career Coach.
Paying cost-sharing amounts in a timely fashion and having an annual wellness visit in the first year of the program will allow for cost-sharing reductions in the second year. In future years, completion of approved healthy behaviors will continue the cost-sharing reduction and will be reassessed every 6 months.
“The Healthy Pennsylvania plan supports independence for all Pennsylvanians, utilizes the private health care market, and increases health care choices for consumers – all without expanding an entitlement program,” Corbett said. “This is truly a Pennsylvania solution.”
The Healthy Pennsylvania Private Coverage Option is contingent upon continued funding from the federal government.