Wolf opts for traditional Medicaid expansion
February 11, 2015 - By Amy Worden
HARRISBURG - Fulfilling a campaign pledge, Gov. Wolf on Monday moved to dismantle his predecessor's alternative to Medicaid expansion and implement a traditional plan to extend health insurance to hundreds of thousands of low-income Pennsylvanians.
Wolf said the "Healthy PA" alternative plan instituted by Gov. Tom Corbett was flawed, confusing some patients and leading others to lose treatment. He called his action a step "toward simplifying a complicated process and ensuring hundreds of thousands of Pennsylvanians have greater access to the health insurance they need."
Corbett aides spent more than a year negotiating with the Obama administration to let them use federal money to pay private insurers to cover the uninsured. And they spent at least $15 million to hire staff and market the Healthy PA program.
The commonwealth joins more than 20 states and the District of Columbia in opting for a traditional expansion of Medicaid as part of the Affordable Care Act.
The shift to Medicaid was applauded by Democratic leaders, unions, and advocates for low-income populations, while Republican legislators raised questions about the costs to switch, future expenses, and whether recipients would have new disruptions in health access.
Unlike in other states, the governor does not need legislative approval to move forward with Medicaid changes.
As a first step, Wolf directed the Department of Human Services (DHS) to submit a letter to the federal government withdrawing the "low-risk" health-care benefits package.
Corbett first proposed an alternative to Medicaid almost two years ago, becoming one of the first Republican governors to do so, using federal dollars made available under the Affordable Care Act to provide private health insurance.
But his plan did not win approval from Washington until last summer and did not take affect until January.
At last count, 156,000 had signed up, officials said, slightly more than a quarter of the 600,000 uninsured Pennsylvanians - most of them working adults - believed to be eligible.
The plan also moved 1.2 million current Medicaid recipients to new plans depending on the severity of their medical conditions.
The program was beset by problems when enrollment opened last fall, including a backlog, confusion among new enrollees, and glitches in moving Medicaid recipients into new plans.
This meant that some individuals who needed care were not receiving treatment and others were placed in the wrong plans, which jeopardized coverage, Wolf said.
Among those affected were patients who lost treatment for drug and alcohol problems because most private plans do not cover addiction and mental health treatment.
Wolf administration officials said that until the process is complete this fall the state will continue to provide individuals with appropriate health-care coverage and that no coverage would be immediately affected by the decision.
The Hospital Association of Pennsylvania said Monday it was pleased the Wolf plan will ensure that individuals covered by Healthy PA will not lose health coverage, but wants to make certain that managed-care organizations be shifted to serve Medicaid beneficiaries and that contracts not be disrupted.
Senate Majority Leader Jake Corman (R., Centre), who supported Healthy PA, said he was concerned about additional information technology expenses after millions were spent to launch Healthy PA.
He said he also had reservations about the potential loss of coverage for recipients in the transition and the shift away from a Pennsylvania-specific plan.
"In the long term, we are concerned that consumers are losing the ability to choose a program that best fits their needs in exchange for the one-size-fits-all Obamacare," Corman said in a statement. "With this action, we cede all control to the federal government - including the program costs or lack thereof."
The state spent $13.2 million to hire an estimated 480 new staff to implement Healthy PA. Officials said the staff will remain in place for the Medicaid expansion.
Kait Gillis, a spokeswoman for the Department of Human Services, said most of the IT costs related to general Affordable Care Act compliance.
She also said the contracts with the managed care organizations were still in place and would be amended as necessary to accommodate the transition.
The state is working with the companies providing private coverage options to address the transition and the phaseout of the plan. There are no payback clauses in the agreements, she said.
DISMANTLING CORBETT'S PLAN
Why: Gov. Wolf believes Healthy PA is too complicated and disrupts health care. Under the Corbett plan, 1.2 million existing Medicaid recipients were switched to private plans, causing some to lose coverage for such things as treatment for drugs and alcohol.
The cost: The state already spent over $15 million on Healthy PA to hire an estimated 480 new staff and for marketing. The additional cost to dismantle the program and finish implementing Wolf's plan in the fall is unknown.