By Melissa Daniels | PA Independent
CORBETT CALLS FOR HEALTHY PA: Gov. Corbett’s plan for Healthy PA includes multiple reforms to Medicaid.
HARRISBURG — Whether Pennsylvania can lower its Medicaid costs is the $430 million dollar question.
That’s how much Medicaid and long-term care costs are going to increase next year, according to state officials, unless a set of proposed alternatives are approved by the federal government.
Even if reforms are approved it’s still unclear how much they would save taxpayers.
Earlier this month, Gov. Tom Corbett announced Healthy Pennsylvania, a plan to create a private insurance option for non-insured residents instead of enrolling them in Medicaid under the Affordable Care Act. Citing a need for more flexibility in Medicaid overall, the plan also streamlines the existing program through a number of cost-reducing, plan-cutting measures.
“These reforms are state-based solutions that will enable sustainability for the current Medicaid program, providing critical care for those who need it most,” Corbett said.
The proposal includes paring Pennsylvania’s 14 separate benefit packages down to two. Co-pays would be eliminated and replaced by a sliding scale monthly premium of up to $25. Beneficiaries who don’t have jobs would have to enter a job search database and possibly receive job training.
Todd Shamash, Corbett’s deputy chief of staff, said Medicaid is an important safety net program for every vulnerable population in Pennsylvania, “but I think we’ve also struggled with the program year after year with sometimes cost increases of hundreds of millions of dollars.”
Medicaid costs account for 27 percent of the general fund budget. The total state and federal spending on the program amounts to $19 billion a year and covers 2.2 million residents.
Anne Bale, a spokeswoman for the Department of Public Welfare, said recent cost increases are due largely to increased usage of Medicaid programs.
Some of the 14 different types of Medicaid benefit packages in Pennsylvania offer more comprehensive care than similar programs in other states, including dentistry or orthopedics. Eligibility is determined based on financial and non-financial criteria such as age or health care needs. Children and young adults under 21 are required to receive mandatory and optional Medicaid covered services.
Pennsylvania spends 34 percent more than the national average for each Medicaid recipient, according to the administration. Figures from the Kaiser Family Foundation show Pennsylvania spends around $4,000 more on care for the elderly than the national average, and around $1,300 less for disabled beneficiaries.
Pennsylvania Medicaid reform would create two plans – one standard package and a higher-level plan for beneficiaries with more health needs.
“We need to reform those benefits to match those provided to working Pennsylvanians through their employers,” Corbett said.
Shamash said the baseline for developing these plans is the health care coverage state employees receive.
Before the state can enact any changes, the Department of Health and Human Services has to approve them. Shamash described those discussions as “very productive,” though there is no time frame for when HHS will sign off.
So far the administration has not publicly offered hard numbers on how much these reforms will save.
Secretary of Welfare Beverly Mackereth said it would be at least enough to free up state dollars to put towards the private insurance option in Healthy Pennsylvania. Since that program would use federal Medicaid dollars that would otherwise go towards a Medicaid expansion, the state would have to pick up 10 percent of the cost several years into implementation.
The Pennsylvania Health Access Network, a coalition of health advocacy groups, supports expanding Medicaid under the ACA, saying Corbett’s plan expands coverage for some but could reduce benefits for others. PHAN director Antoinette Kraus said Pennsylvania’s many Medicaid plans are an important safety net because they can fill in coverage gaps.
“Some Medicaid enrollees are covered by employer plans as the policyholder, spouse, or child, but the coverage is insufficient because of their health care needs, and they have to turn to Medicaid to cover the balance of their care,” Kraus said in an email to PA Independent.
The state pays what’s called “managed care organizations,” a flat rate to provide Medicaid services. Kraus said it’s possible some MCOs are overpaid for coverage that beneficiaries never receive.
“If so, it may make sense for Pennsylvania to revisit how the Medicaid managed care system works in Pennsylvania,” she said. “It does not make sense to impose a one-size-fits-all benefits package on people who rely on Medicaid for a safety net.”
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