Healthy PA: Pennsylvania's Attempt to Reform Medicaid Contravenes the Goals of the ACA's Medicaid Expansion

JURIST Senior Editor Leigh Argentieri Coogan, University of Pittsburgh School of Law, Class of 2014, discusses the Patient Protection and Affordable Care Act and Governor Corbett's implementation of Healthy PA ...

After the US Supreme Court ruled the Patient Protection and Affordable Care Act's (ACA) (PDF) requirement for all states to expand Medicaid unconstitutional, states faced the choice of whether to expand Medicaid. Currently in Pennsylvania, Governor Tom Corbett decided that Pennsylvania will not expand Medicaid, but rather will attempt to implement Healthy PA (PDF).

The ACA required that all states expand Medicaid programs "to cover adults under 65 who make up to 133 percent of the federal poverty level." Additionally, the ACA requires coverage for those who previously fell into the gaps for Medicaid coverage. In the past, Medicaid only covered "low income individuals in a specified category, such as children, their parents, the aged or individuals with disabilities." However, the Supreme Court in National Federation of Independent Business v. Sebelius ruled the ACA's requirement that all states must expand Medicaid or risk losing federal funding for Medicaid unconstitutionally coercive. Chief Justice Roberts held that what "Congress is not free to do is to penalize [s]tates that choose not to participate in that new program by taking away their existing Medicaid funding." The majority opinion found that altering Medicaid to include all people up to 133 percent of the federal poverty level to be such a substantial change to Medicaid as to constitute medicaid expansion as an entirely new program, rather than to consider medicaid expansion as an alteration of the existing Medicaid program.

Therefore, holding medicaid expansion unconstitutional allowed each state to choose whether it would implement it. For the states that decided to expand Medicaid, people who make up to 133 percent of the federal poverty level will be eligible for Medicaid. However, if a person exceeds this, she will be eligible for tax credits that lower the cost of a health plan's monthly premium purchased through the Health Insurance Exchange Marketplace. In a state that expanded Medicaid, the individual will find out if she is eligible for Medicaid when she fills out a Marketplace application.

A huge problem exists, however, for individuals who live in states that did not expand Medicaid and fall below 100 percent of the federal poverty level, because "[m]any adults in those states with incomes below 100 percent of the federal poverty level fall into a gap. Their incomes are too high to get Medicaid under their state's current rules. But their incomes are too low to qualify for help buying private coverage in the Marketplace." Medicaid expansion as originally contemplated and passed into law "required states to provide Medicaid coverage for adults between ages 18 and 65 with incomes up to 133 percent of the federal poverty level, regardless of their age, family status or health. It also provides tax credits for people with incomes between 100 percent and 400 percent of the federal poverty level to buy private insurance plans in the Marketplace." Therefore, for people who live in states, such as Pennsylvania, which do not cover certain individuals below the 100 percent poverty line, will not be qualified for any type of assistance with paying for the cost of health insurance. Thus, the Supreme Court's decision thwarted the entire purpose of Medicaid Expansion to provide affordable heath care coverage to our nation's poorest people, who cannot afford to pay for health insurance.

As of January 1, 2014, Corbett decided not to expand Medicaid in Pennsylvania. However, Corbett created Healthy PA as a quasi-alternative for Medicaid Expansion. Corbett does not seek to expand Medicaid, but rather he submitted an application to Health and Human Services (HHS) for a § 1115 waiver to restructure Pennsylvania's Medicaid program. According to Medicare.gov, "[w]aivers are vehicles states can use to test new or existing ways to deliver and pay for health care services in Medicaid." A § 1115 Research & Demonstration Projects Waiver provides states the opportunity to "apply for program flexibility to test new or existing approaches to financing and delivering Medicaid." The purpose of a § 1115 waiver includes allowing states to "[e]xpand eligibility to individuals who are not otherwise Medicaid or CHIP eligible, [p]rovide services not typically covered by Medicaid, [and] [u]se innovative service delivery systems that improve care, increase efficiency and reduce costs." While Corbett appears to be expanding the number of people in Pennsylvania eligible for assistance with paying for health insurance, reducing costs to the state appears to be the only aspect of Healthy PA that truly aligns with the purpose of a § 1115 waiver.

On February 19, 2014, Corbett submitted Pennsylvania's § 1115 Waiver to HHS. The waiver consists of over 200 pages, but the most significant changes to Medicaid under Healthy PA involve new cost sharing obligations. Healthy PA will not expand the eligibility for Medicaid, but will create a new private insurance program (PDF) allowing people up to 133 percent of the federal poverty level to have access to state-subsidized health insurance. Everyone applying to either Medicaid or the private insurance program will be screened to determine the status of the individual's health. Those eligible for Medicaid will be placed in either a low-risk health plan or a high-risk health plan. The individuals placed in the low-risk plan will have limited access to certain medical procedures, because those individuals have been determined healthy. Additionally, under Healthy PA, people on Medicaid will now be required to pay copayments for certain medical visits and procedures.

For those who do not qualify for Medicaid, but do qualify for the private insurance program, they will be able to go to the private marketplace to choose between two health plans. There will be a copayment obligation during the first year of Healthy PA. After the first year, those who make above 100 percent of the federal poverty level will have to pay monthly premiums, but no copayments. For those who make below 100 percent of the federal poverty level, but do not qualify for Medicaid, they will have to continue to pay copayments and the state will "consider changes to support incentives and personal responsibility." Therefore, those individuals may also have to pay a premium after the first year, too. Participants in both Medicaid and the private insurance program will be required to pay a $10 copay for each emergency room visit.

On March 5, 2014, Corbett did submit an amendment (PDF) to the § 1115 waiver. The amendment to Healthy PA changes the encouraging employment program, an extremely contentious component of Healthy PA, from being mandatory to being optional for participating in either Medicaid or the private insurance program. Corbett alleges that this one year program would incentivize people with income below 100 percent of the federal poverty line to work in order to have reduced premiums on their health insurance.

Likely, HHS will reject Corbett's waiver to change Medicaid, because of the fundamental changes to Medicaid regarding cost-sharing obligations for those who truly cannot afford it. Healthy PA's cost-sharing obligations will be prohibitive for people to participate in the program, and thus, those people will not be able to access affordable health care coverage. The ACA sought to increase access to health care coverage to our nation's poorest people through eliminating special groups to be eligible for Medicaid and expanding those eligible for Medicaid to up to 133 percent of the federal poverty level. Healthy PA not only does not expand who may be covered under Medicaid, but requires people in Medicaid to contribute to the cost of health insurance, which does not encourage participation in Medicaid for those who make very little income.

Leigh Argentieri Coogan earned her BA in English and American Literature from Harvard College. She is a senior editor and editorial board member for JURIST and outgoing editor-in-chief of the Journal of Law and Commerce.

Suggested citation: Leigh Argentieri Coogan, Healthy PA: Pennsylvania's Attempt to Reform Medicaid Contravene's the Goals of the ACA's Medicaid Expansion , JURIST - Dateline, Apr. 18, 2014, http://jurist.org/dateline/2014/04/leigh-coogan-pennsylvania-medicaid.php.



This article was prepared for publication by Endia Vereen, a Section Editor for JURIST's commentary service. Please direct any questions or comments to her at studentcommentary@jurist.org

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