Pennsylvania expands Medicaid under Affordable Care Act

Medicaid will now be available to more low-income residents in Pennsylvania following the state’s agreement with the Centers for Medicare and Medicaid (CMS) to expand coverage under the Affordable Care Act (ACA).

The agreement, announced August 28, reforms the state’s Medicaid program and offers a Private Coverage Option (PCO) to uninsured adults between the ages of 21 to 64 who are below 133% of the Federal Poverty Level (FPL), according to the Pennsylvania Governor’s Office.

The move will allow approximately 500,000 Pennsylvanians to gain coverage, according to CMS Administrator Marilyn Tavenner. Pennsylvania is the 28th state, including the District of Columbia, to expand Medicaid as part of the ACA.

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The state has previously characterized its Medicaid system as an “unsustainable entitlement program” that eats up 29% of the general fund. It balked at expanding the current model and pushed instead for private options. The PCO model lets the state contract with licensed health insurance entities to provide coverage that meets Medicaid managed care requirements.

Relying on commercial insurance carriers “will help to reduce bureaucracy,” said Pennsylvania Gov. Tom Corbett in a press release.

The plan also provides recipients with job training and employment resources. Enrollment begins December 1, 2014, and coverage begins January 1, 2015.

“From the beginning, I said we needed a plan that was created in Pennsylvania for Pennsylvania − a plan that would allow us to reform a financially unsustainable Medicaid program and increase access to health care for eligible individuals through the private market,” Corbett said.

It’s unclear how or if Pennsylvania’s adoption of Medicaid expansion will impact the backlog of applications. Currently one in five, or 65 million people receive health insurance through Medicaid, according to federal data released through April. Six million have applied for Medicaid coverage as a result of the ACA, but many applications are backlogged and have yet to be processed, as previously reported in Medical Economics.

States that have thus far resisted expanding Medicaid are forgoing billions in federal aid and delaying coverage to millions, according to the Urban Institute, a non-partisan economic and social policy research organization.

According to Tavenner, “millions of Americans are still without Medicaid coverage because their state has yet to act.”