Bertolain Elysee, ParalegalCommunity Legal Services

June 18, 2014

Medicaid Expansionand the Pennsylvania Budget

Agenda• Medicaid: Who Is Covered, and Who Is Left Out?

• Healthy Pennsylvania Overview

• Healthy Pennsylvania Approval and Implementation Process

• Medicaid Expansion and the Budget

• Q & A

Categorical Eligibility• Federal Medicaid benefits are only available for certain categories

of individuals, including:– Pregnant women.– Children.– Individuals with long-term disabilities.– Very low income families.– Seniors (ages 65 and older).

• Pennsylvania covers a few more categories of individuals via General Assistance-related Medical Assistance, including:– Individuals with shorter-term disabilities.– Domestic violence survivors (9 months in lifetime).– Individuals in active drug and alcohol treatment (9 months in lifetime).

Who Is Left Out of Medicaid?

• Low-income adults who are:– Between the ages of 19 and 64; – AND not disabled;– AND not pregnant;– AND not parents or related caregivers with very low incomes;– AND not eligible for General Assistance-related Medical

Assistance.

• This is the population that is eligible for Medicaid expansion under the Affordable Care Act – approximately 600,000 adults in Pennsylvania.

Medicaid Expansion

Year Federal Share

StateShare

2014 100% 0%

2015 100% 0%

2016 100% 0%

2017 95% 5%

2018 94% 6%

2019 93% 7%

2020 90% 10%

• The ACA’s drafters required states to expand Medicaid to cover low-income people who fall into the Medicaid coverage gap.

• In exchange the federal government would provide enhanced matching funds to states.

• The U.S. Supreme Court’s ruling in National Federation of Independent Business v. Sebelius had the effect of making expansion optional for states.

Benefits of Medicaid Expansion

• The Commonwealth’s Independent Fiscal Office found that Medicaid expansion would bring Pennsylvania an average of $600 million in new revenue each year over the next ten years.

• A study commissioned by the Hospital and Healthsystem Association of Pennsylvania and conducted by the RAND Corporation found that the increase in federal spending in Pennsylvania would create more than 35,000 new jobs, particularly in the health care sector.

Medicaid Expansion Nationwide

Pennsylvania’s Health Reform Proposal

• After two years of mounting public pressure to expand Medicaid, on February 19, 2014, Pennsylvania submitted its Healthy Pennsylvania plan to HHS (the US Dept. of Health and Human Services) for approval.

• The plan would:– Cover newly eligible low income Pennsylvanians.– Make significant changes to the current Medicaid program.

• In the plan, Pennsylvania seeks 24 waivers of federal Medicaid law.

The Private Option Program

• Other states (AR, IA) asked HHS for permission to cover them through their Marketplaces instead of through their traditional Medicaid program.– The Medicaid expansion population would go onto the

Marketplace and choose commercial insurance coverage.– Medicaid dollars would be spent to cover the full cost of

their premiums.– Commercial coverage is more expensive than Medicaid, so

states would have higher costs beginning in 2017.

The Private Option Program, cont.

• HHS has said that it will approve “private option programs” as long as certain conditions are met:– E.g., states have to provide “wrap around” services.– Wrap around services = enhanced family planning, non-

emergency medical transportation, treatment at health centers.

• Pennsylvania intends to create a private option program, but it has asked HHS for permission not to provide enhanced family planning or non-emergency medical transportation.

Other Proposal Components

• Severe cuts to Medicaid benefits for all current adult recipients.

• Premiums for many current Medicaid recipients and for private option program enrollees.

• Potential work search requirement for Medicaid recipients.

• Penalties for non-compliance with premium requirements.

• Elimination of MAWD.

Work Search Requirement

• In March 2014, the Corbett administration indicated that these requirements may become “voluntary” and instead used as premium reduction incentives.

• In the original Healthy PA proposal, however, most Medicaid recipients working less than 20 hours per week would need to register with Pennsylvania’s JobGateway system unless exempt.

• Recipients would engage in an average of 12 work search activities per month in 2015, or they would lose coverage at their 2016 reapplication.

• Compliance with the work search requirement would be monitored every six months beginning in 2016.

Work Search Exemptions

• Only some Medicaid recipients would be exempted from work search requirements automatically:– People under 21 and over 64.– Pregnant women.– SSI recipients.– People dually eligible for Medicaid and Medicare.– People who are institutionalized.

• Other people with demonstrated inability to work (people receiving Social Security Disability benefits or home and community based services) would need to apply for exemptions.

Problems with Work Search• Medicaid recipients who can work, do work, or are looking for work.

• The work search requirement and exemption process is burdensome to people with disabilities.

• There are concerns about DPW’s capacity to grant exemptions properly.

• There are concerns about JobGateway’s capacity to handle so many new users.

• JobGateway is difficult to navigate, especially for people with lack of computer access, low levels of literacy, or limited English proficiency.

• HHS has already told Pennsylvania that it will not allow work search requirements.

Premium Payment Requirement• Beginning in 2016, premiums would be required for Medicaid recipients

above the poverty line, unless they qualify for an exemption.

• Exemptions would be given to:– People under 21 and over 64.– Pregnant women.– SSI recipients.– People dually eligible for Medicaid and Medicare.– People who are institutionalized.

• Non-exempt recipients would pay $25 per month ($35 per month per couple).

• No hardship waivers would be offered.

Premium Reduction• Successful completion of healthy behavior activities would lead to

reductions in premiums.

• Healthy behaviors may include:– Paying premiums on time for six months.– Completing a Health Risk Assessment.– Completing a physical exam annually.– Working or fulfilling work search requirements.

• Pennsylvania’s final plan is vaguer than its draft plan:– It no longer specifies which healthy behaviors will lead to premium reductions,

and how much premiums may be reduced.– It seeks “flexibility and authority to change or expand the list of healthy

behaviors for which premium and copayment reductions are available.”

Problems with Premiums

• Public health research overwhelmingly shows that premiums are a barrier to Medicaid recipients’ access to health care, and actually make them sicker.

• Most Medicaid recipients do not have room in their budgets for premium payments, and many recipients are “unbanked.”

• There are concerns about DPW’s capacity to collect, process, and/or monitor premium payments.

• The costs of premium collection will not offset the nominal amount of money collected.

Other Cost-Sharing• All Medicaid recipients would be required to pay $10 for non-emergent

use of emergency rooms.

• In 2015:– All existing Medicaid copays would remain in effect. – Doctors could deny services to recipients above the poverty line for nonpayment.

• In 2016:– Copays for recipients above the poverty line would be replaced by premiums.– Copays for recipients below the poverty line would remain in effect, but would

be billed monthly by and paid to Pennsylvania.– DPW reserves the right to change copays for recipients below the poverty line,

make copays mandatory, or impose monthly premiums instead of copays.

Penalties for Non-Compliance• Medicaid recipients who miss three consecutive premium payments or

are not able to prove compliance will be “locked out” of coverage:– The first “strike” would lock a recipient out for three months.– The second “strike” would lock him or her out for six months.– The third “strike” would lock him or her out for nine months.

• Medicaid recipients who are locked out because they missed premium payments must pay arrears before they will be permitted to reenroll.

• Lockout periods would burden hospitals, who would be required to provide uncompensated care to Medicaid recipients who require emergency treatment while they are locked out.

Elimination of MAWD• MAWD would be eliminated:

– Lower-income recipients would be enrolled in the private option program.

– Higher-income recipients would be required to purchase commercial insurance through the Marketplace.

• While commercial plans may meet the needs of some MAWD recipients, others are very sick, and require Medicaid benefits packages that are tailored to their needs.

• MAWD recipients who also receive Medicare would lose coverage altogether, and would be faced with financially ruinous medical costs and expenses.

Medicaid Expansion and the Budget

• The Pennsylvania General Assembly must pass a budget by June 30, 2014, though there is a decent chance that won’t happen this year.

• The budget must address a growing budget shortfall for this fiscal year and close a budget gap of up to $1.7 billion for the next fiscal year.

• Lawmakers are weighing a mixture of budget cuts and new revenues to close the gap.

Healthy Pennsylvania and the Budget

• Governor Corbett’s Executive Budget from February 2014 anticipated $125.4 million in savings through Healthy Pennsylvania for the coming fiscal year.

• The bulk of those savings come from moving state-funded General Assistance-related Medical Assistance recipients into the private option program in 2015.

• DPW anticipates $7.2 million in savings from eliminating MAWD and $9.5 million in savings from benefits cuts.

Medicaid Expansion and the Budget

• Advocates and some lawmakers are encouraging the General Assembly to enact Medicaid expansion on July 1, 2014, as a temporary “bridge” to Healthy Pennsylvania.

• Medicaid expansion “bridge coverage” would ensure that Pennsylvania would get more than $600 million in federal funding for the next fiscal year, through immediately earning 100% federal funding for General Assistance-related Medical Assistance recipients and generating other revenue – all while covering 600,000 low-income Pennsylvanians right away.

Medicaid Expansion and the Budget

• The House Human Services Committee recently passed HB 1492, which would create Medicaid expansion “bridge coverage” until Healthy Pennsylvania or another plan could take effect.

• The full House could now consider HB 1492, though House leaders have said that they do not plan to act on the bill.

• Medicaid expansion “bridge coverage” could also be enacted through the budget bill itself.

Take Action Today!

• Contact your Pennsylvania legislators in the House and Senate and tell them that immediate Medicaid expansion, as a bridge to Healthy Pennsylvania, should be a part of any budget deal.

• The message is simple: tell lawmakers to “close the budget gap by closing the coverage gap.”

• Share this information with your family and friends.

Questions?