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Pa. tries to save on Medicaid by providing private insurance

| Friday, June 20, 2014, 10:33 p.m.

Gov. Tom Corbett's administration is preparing to provide private insurance for Medicaid-eligible residents even before the state has a deal with the federal government for money to extend coverage to a half-million more Pennsylvanians.

Pennsylvania is among 24 states that opted out of the federally subsidized Medicaid expansion that began on Jan. 1 under the Affordable Care Act.

The Corbett administration has been seeking approval from the Department of Health and Human Services to tap federal money so adults earning up to 133 percent of the federal poverty level ($31,721 a year for a household of four in 2014) can purchase private commercial health care coverage.

A similar program operates in Arkansas, where the government approved a waiver. A Corbett spokeswoman said officials are optimistic they can begin offering Healthy Pennsylvania coverage to 500,000 to 600,000 eligible state residents by Jan. 1.

A spokesman for the Pennsylvania Department of Public Welfare said the program, if the feds approve, could save the state $125 million in Medicaid costs next year.

Corbett said on Friday that nine commercial organizations across the state are approved to participate as insurers in the Healthy Pennsylvania Private Coverage Option plan. He said the administration soon will begin negotiations with the companies.

Critics say Corbett's decision to negotiate a waiver cost the state millions of dollars in federal subsidies that began flowing in participating states this year.

“Our number-one concern is that every day we don't adopt (Medicaid expansion), we're losing $4.8 million a day,” said Antoinette Kraus, director of the PA Health Access Network.

Kraus said New Hampshire took a different route when it opted to expand Medicaid benefits while it negotiated a waiver for an alternative program.

“There are options. We could have done something like that,” she said.

Corbett spokeswoman Christine Cronkright said the administration wants to increase access to health care but is concerned about crafting a program that is sustainable in the longterm.

“We believe we cannot expand Medicaid without first reforming it,” she said.

Cronkright said Medicaid varies from state- to-state and that New Hampshire's approach might not work for Pennsylvania.

Companies approved to participate in the proposed program in Western Pennsylvania include United Healthcare, Aetna Better Health, UPMC, Vista and Keystone Health Plan West/Highmark.

“In order to avoid delaying coverage to uninsured Pennsylvanians, we and HHS agreed that it would be sensible to move forward with soliciting applications from PCOs while the waiver is being negotiated,” Corbett said. “The federal government has also provided funding for necessary technological changes to support the Healthy Pennsylvania plan.”

He added, “This response from insurers was a critical step in building the framework to responsibly increase health care coverage through the private market for more than 500,000 Pennsylvanians. The number of applicants demonstrates that this innovative approach can and will work once approved.”

Debra Erdley is a staff writer for Trib Total Media. She can be reached at derdley@tribweb.com.

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