By Chris Comisac
Bureau Chief
Capitolwire
HARRISBURG (Feb. 9) – Gov. Tom Wolf on Monday made good on a campaign promise and announced what he called “a first step” toward undoing Healthy PA, one of Gov. Tom Corbett’s signature policy accomplishments.
“Governor Wolf directed DHS to withdraw the ‘low-risk’ (Healthy) health care package from further federal consideration,” wrote Kait Gillis, press secretary for the state Department of Human Services (DHS). “DHS is already at work making changes to eligibility systems that will allow us to efficiently transition individuals participating in the General Assistance and SelectPlan programs to the new health plan by spring.”
The letter in question advises the federal Centers for Medicare and Medicaid Services (CMS) the DHS is withdrawing its application – filed by the prior Corbett administration – to alter a portion of the state’s existing Medicaid program. Prior to the Healthy PA changes, the Medicaid program for most participants functioned in a managed care environment, referred to as HealthChoices.
Under Healthy PA, the state’s Medicaid program was streamlined from 14 different benefit packages to three separate benefit packages: a low-risk plan, a high-risk plan and a private care option (PCO) plan, with the last plan designed to provide insurance to a population made newly eligible by the expansion of the Medicaid program’s income eligibility guidelines (up to 138 percent of the federal poverty level), as allow for by the federal Affordable Care Act. The state has estimated approximately 600,000 more people could be added to the Medicaid program through the expansion. Prior to Wolf taking office, the DHS said approximately 150,000 households had applied for coverage under Healthy PA.
The Corbett administration in late December received final federal approval for its high-risk and PCO plans, but not the low-risk plan. A few lawsuits, seeking injunctions to stop the Healthy PA changes, were filed before the start of 2015, but none were successful. The federally-approved Healthy PA benefit plans became effective on Jan. 1, 2015.
With regard to the high-risk and PCO plans, the journey to transition to a simple expansion of the traditional Medicaid program could take longer.
Wrote Gillis: “The department is currently working on a plan to transition individuals into one streamlined Adult package without interruption to their coverage and services. DHS is also working with the commonwealth’s health care providers and hospitals to transition individuals enrolled in the PCO to the Adult package. These transitions will occur over a longer period of time to ensure that individuals are clearly informed of these changes and they do not experience any gap in coverage.”
Added Gillis in a separate email: “Today began the transition to traditional Medicaid expansion, with the low-risk withdrawal letter to CMS. Next steps will include the transfer of individuals enrolled in General Assistance and SelectPlan into HealthChoices in the spring. Also in the spring, we will close the Private Coverage Option (PCO) to further enrollments. The transition will be complete in the fall when all individuals remaining in the PCO will be transferred to HealthChoices.”
The health insurance providers contracted with the state to provide PCO products have three-year contracts. However, DHS has noted in the past such contacts are normally reviewed each year to determine if changes are required.
During a Monday afternoon press conference in the state Capitol newsroom, House Minority Leader Frank Dermody, D-Allegheny, House Minority Whip Mike Hanna, D-Clinton and Democratic Caucus Chairman Dan Frankel, D-Allegheny, praised Wolf for moving forward with the transition. The three said the switch would eliminate the confusion caused by what they called an overly complex Healthy PA program and save the state money with the Commonwealth facing a potential state budget shortfall of $2 billion at the end of June – although they couldn’t say how much more it would save than the Healthy PA plan.
“The full Medicaid expansion would be greater, but I’m not sure what that’s going to be, depending on how this transition works, but it would ultimately be much greater than Healthy PA,” said Dermody.
The Corbett administration estimated Healthy PA would save the state approximately $616 million for the full 2015-16 fiscal year, and about $4.5 billion during the next eight years, with the majority of those savings coming from “federalizing” the costs of health care coverage for the General Assistance (GA) population. The GA population – paid for only with state dollars – will switch to being paid for with mostly federal dollars (initially 100 percent of their costs will be covered by the federal government with that gradually declining to 90 percent by 2020).
Senate Minority Leader Jay Costa, D-Allegheny, likewise commended Wolf for his decision.
“Medicaid expansion makes the same sense today as it did years ago when this discussion started,” said Costa in a press release. “As we said all along, it is responsible, meaningful and good public policy and one that saves the taxpayers more than a billion dollars over the next three to four years.
“I am proud to stand in support of the governor’s decision to move this program forward.”
Not everyone was excited about Wolf’s announcement.
“From a pragmatic standpoint, I personally have a lot of concerns about what this means for the state and the taxpayers in terms of the final bill to unwind this and to change horses in midstream,” said House Majority Whip Bryan Cutler, R-Lancaster.
Cutler also expressed concern about “providing care for these folks who are already enrolled – what does that transition look like, what assures that they are going to have better access to care.
“We need to be in a position to provide the best care at the lowest cost, and I’m simply not sure this does that.”
Questions were recently raised by the federal Department of Health and Human Services’ Office of Inspector General regarding access to care in Medicaid managed care, although no specific problems in Pennsylvania were identified by the review. Pennsylvania’s Medicaid managed care organizations said they are currently reviewing their provider networks to ensure that adequate access is available to all Medicaid participants. Healthy PA has had some enrollment and coverage issues of its own since its rollout, although the DHS, prior to Wolf’s inauguration, said it was working to resolve those issues as quickly as possible.
Cutler added: “The last concern for me, in addition to the liability that could be incurred by the taxpayers, is really the question of what happens if the federal government does not fully fund its piece of this.”
He said when it comes time to cut the federal budget, two of the top items normally on the chopping block are Medicare and Medicaid reimbursement rates.
“I’m just not confident in their ability to keep funding it,” said Cutler.
Senate Majority Leader Jake Corman, R-Centre, was equally skeptical about Wolf’s plan.
“Today’s action by Gov. Wolf was hardly surprising,” said Corman in a press release. “We are concerned that about $95 million in IT and setup costs already have been incurred. That’s significant for a program that never had an opportunity to be judged on its merits. Rather, the program is being scrapped due to ideology and taxpayers will have to incur the costs of set up for yet another system.
“However, the immediate concern is making certain that people who have already signed up for Healthy PA to receive benefits don’t have their coverage disrupted because of this transition to Obamacare. We remain committed to providing healthcare opportunities for all Pennsylvanians while preserving the cost controls that were to be achieved through Healthy PA.
“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. With this action, we cede all control to the federal government – including the program costs or lack thereof.”
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