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Pennsylvania lost out by not expanding Medicaid under Affordable Care Act, White House says

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Wednesday, July 2, 2014, 10:57 p.m.
 

Pennsylvania missed out on $2.5 billion in federal money and 7,900 jobs by not expanding its Medicaid program this year under the Affordable Care Act, according to a report issued Wednesday by the White House.

The state would be in line to receive $5.8 billion in 2015 and 2016 if it chooses to take federal money to enlarge eligibility of the health insurance program for the poor, according to President Obama's Council of Economic Advisers. The expansion would generate 26,800 jobs during the same period, the council's report said.

Pennsylvania is one of 24 states that didn't expand the program. But Gov. Tom Corbett, a Republican who opposed Obama's health care overhaul, has asked the Obama administration for permission to use federal money for private insurance as an alternative to expansion.

The plan, known as Healthy PA, needs approval from Centers for Medicare & Medicaid Services. But Corbett is proceeding with plans to implement his proposal next year, said Christine Cronkright, a spokeswoman.

“We continue to move toward a Jan. 1, 2015, start date goal,” she said. “We believe the Healthy PA plan allows us to responsibly increase access to health care here in Pennsylvania and will continue to work through negotiations with the federal government.”

Healthy PA seeks changes to the Medicaid program, such as requiring beneficiaries to contribute toward a monthly premium, and would use federal funds to purchase private insurance for newly eligible recipients. Arkansas and Iowa have received federal approval for similar alternative plans.

Nine health insurance companies have agreed to provide private health plans to uninsured people under Healthy PA.

“We need to explore Medicaid reform before we expand the program any further,” Cronkright said. “We are confident that this is the right plan for Pennsylvania.”

The Centers for Medicare & Medicaid Services is reviewing Corbett's proposal, spokesman Aaron Albright said.

“CMS remains in close contact with the state during and following the waiver application public comment period and continues to provide technical assistance before making a decision,” he said.

He declined to provide a timeline for the decision.

The council report details economic benefits states are foregoing by refusing to expand Medicaid, which is funded equally by state and federal dollars. The federal government will pay 100 percent of the cost of expansion through 2016. It drops to 90 percent by 2020.

The government would pay for Medicaid coverage to individuals and families with household income up to 138 percent of federal poverty level — $16,105 for an individual or $32,913 for a family of four in 2014.

There are 2.2 million Medicaid beneficiaries in Pennsylvania. An estimated 500,000 people would gain coverage under expansion of Corbett's plan. The expansion is intended to help working people who make too much to qualify for Medicaid but not enough to receive federal subsidies on Healthcare.gov.

“Researchers at the Urban Institute estimate that, if these states do not change course, 5.7 million people will be deprived of health insurance coverage in 2016,” the council report states. “Meanwhile, these states will forgo billions in federal dollars that could boost their economies.”

Ed Haislmaier, senior research fellow with the Heritage Foundation, a conservative think tank in Washington, argued that Medicaid expansion isn't all positive.

Many of the people who would benefit from Medicaid coverage could instead increase their work hours and income slightly and qualify for federal subsidies available to uninsured people who buy health plans through Healthcare.gov. Subsidies start for people whose income is 100 percent of the federal poverty level, or $11,670 for a single person and $23,850 for a family of four.

“To the extent you provide this group welfare, you will reduce work incentives,” Haislmaier said.

Alex Nixon is a staff writer for Trib Total Media. He can be reached at 412-320-7928 or anixon@tribweb.com.

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