Pennsylvania’s request for federal approval of its Medicaid expansion plan has been approved by the federal government.
The plan, part of the Corbett administration’s “Healthy Pennsylvania” health care reform proposal, calls for an expanded population of Pennsylvanians who are newly eligible for Medicaid to obtain subsidized coverage through the private health insurance market – managed care organizations approved by the state to serve the new Medicaid expansion population.
The letter of approval from Centers for Medicare & Medicaid Services (CMS) administrator Marilyn Tavenner to Pennsylvania Department of Public Welfare Secretary Beverly Mackereth notes that

…the state aims to modify Pennsylvania’s Medicaid program and expand access to coverage to adults in Pennsylvania with incomes through 133 percent of the federal poverty level (FPL) beginning January 1, 2015.

The terms of the demonstration have been incorporated into the accompanying Special Terms and Conditions (STCs) and waiver authorities for the demonstration approval. The approved demonstration authorizes the state to charge premiums to newly eligible individuals up to 133 percent of FPL with access to health care coverage through managed care health plans. Specifically, beginning in January 2016 of the demonstration, the state may charge monthly premiums in an amount not to exceed 2 percent of household income for certain adults with incomes above 100 percent of the FPL.

Beneficiaries subject to a premium as authorized by the demonstration will not be charged copayments (with the exception of an $8 copayment for non- emergency use of the emergency room, which the state may authorize within the Medicaid state plan). Individuals failing to pay the monthly premiums for three consecutive months may be disenrolled from coverage, and may re-enroll without a waiting period. The Commonwealth is not imposing premiums on individuals with incomes at or below 100 percent of the FPL.

The Healthy Pennsylvania demonstration includes an incentive program that is intended to improve the use of preventive services and other healthy behaviors. Enrollees who complete specified healthy behaviors during the first year of enrollment in the demonstration shall have their premium obligations reduced in their second year. For each subsequent year, enrollees will have the opportunity to complete healthy behaviors to reduce their amount of financial obligations.

We have provided authority for the state to not offer non-emergency medical transportation (NEMT) during the first year of the demonstration. This authority will sunset on December 31,2015, and the state will provide NEMT to these beneficiaries beginning in year 2 of the demonstration. The changes in the Pennsylvania demonstration are consistent with those in other demonstrations.

The Commonwealth will deliver services to the newly eligible population through contracts with managed care organizations. Individuals covered will have the choice of an approved health plan in their region. Medicaid managed care rules continue to apply under the demonstration although as stipulated in the demonstration the Commonwealth may rely on state or federal commercial standards when those standards are at least as robust as the Medicaid standards.

Benefits provided to individuals eligible under the expansion will be consistent with federal statutory requirements effectuated through amendments to the Commonwealth’s state plan, rather than the approved demonstration. The expansion population, including those who are subject to this demonstration and those who are medically frail and covered outside of this demonstration, will receive the full complement of health services required under the law. Medically frail individuals will receive coverage from the state through a “high risk” benefit plan.

CMS and the state have been in active consultation on the state plan amendments needed to effectuate this change and have reached agreement on the overall benefits approach, pending final submission of documents by the state consistent with the agreement that has been reached.

In addition, outside this demonstration, the state aims to encourage employment through incentives for job training and work-related activities, including access to Healthy Pennsylvania Career Coaches, for Healthy Pennsylvania beneficiaries who choose to participate in the state’s Encouraging Employment program. Health coverage provided by the Medicaid program and this demonstration will not be affected by this state initiative.

The complete approval letter and a second document describing the special terms and conditions the federal government has attached to the waiver approval can be found here, on the Healthy Pennsylvania web site.

In anticipation of the possibility of receiving approval from the federal government to expand its Medicaid program, the Corbett administration is soliciting bids from insurers interested in serving the state’s Medicaid expansion population.
The market for those insurers:  approximately 600,000 people who would become eligible for Medicaid and free to choose from among eligible insurers.
The Corbett administration has taken a sometimes-controversial approach to Medicaid expansion, seeking to underwrite premiums to private insurers for those newly eligible for Medicaid coverage.  For months the administration has been negotiating the terms of its proposed Healthy Pennsylvania Medicaid expansion plan with the federal government, and the decision to seek bids in anticipation of a possible January 1, 2015 launch of Medicaid expansion is viewed as a sign that those negotiations are going well.
Read about this latest development in Pennsylvania’s bid to expand its Medicaid program through a private market option in this Philadelphia Inquirer article.  Find the state’s request for applications for insurers interested in serving the Medicaid expansion population here.