CMS Approves Pennsylvania’s Medical Assistance (Medicaid) Waiver

CMS approved Pennsylvania’s Medical Assistance (“Medicaid”) waiver request entitled Healthy Pennsylvania (“Waiver” or “Healthy Pennsylvania”) by letter dated August 28, 2014.  Governor Tom Corbett and the Pennsylvania Department of Welfare submitted the waiver application in February. The approval paves the way for a five-year demonstration project that begins on January 1, 2015 and is intended to “expand access to coverage to adults in Pennsylvania with incomes through 133 percent of the federal poverty level.” The Waiver includes changes that will be implemented through state Medicaid plan amendments and the demonstration project.

Waiver Priorities

• Improving access;
• Ensuring quality; and
• Providing affordability.

Waiver Objectives

• Promoting access to health insurance through the private insurance marketplace;
• Encouraging healthy behaviors and appropriate care, including early intervention, prevention, and wellness; and
• Increasing quality of care and efficiency of the health care delivery system.

Waiver Highlights (applicable to individuals enrolled in Medicaid and Healthy PA PCO)

• Inclusion of a private coverage option, Healthy PA PCO, which will make coverage available through a private commercial market that will operate outside of the Pennsylvania’s federally-run exchange
• Commercial insurance carriers, who are likely to be HealthChoices MCOs, will offer at least two health plans for individuals eligible for Healthy PA PCO
• Inclusion of Medicaid plan options categorized as “low risk” or “high risk” (these plans are not yet finalized and the parameters will be subject to negotiation with CMS)
• No premiums are required in year one
• Monthly premiums are required in year two for eligible individuals who have incomes greater than 100% of the federal poverty level (up to 2% of their income with the ability to reduce the premium based on healthy behaviors)
• Individuals enrolled in Healthy PA PCO and Medicaid will pay an amount equal to currently existing Medicaid copayments in year one of Healthy Pennsylvania’s implementation
• Elimination of copayments, except for $8 co-payments for non-emergency visits to emergency rooms, beginning in year two of Healthy Pennsylvania’s implementation

The Hospital & Healthsystem Association of Pennsylvania recently announced its support of Healthy Pennsylvania’s goals. Despite those who oppose Healthy Pennsylvania because among other reasons, it is viewed as not being the “traditional” Medicaid expansion as envisioned by the Affordable Care Act, Governor Tom Corbett anticipates that Healthy PA PCO will increase access to health care for over 600,000 eligible Pennsylvanians. Notably, CMS did not approve the proposed work search requirement, which would have required certain adults to undertake work search activities in order to qualify and remain eligible for health coverage under Healthy Pennsylvania. According to CMS, the approval of Pennsylvania’s Waiver makes it one of 28 states, including the District of Columbia, to expand Medicaid.

For more information regarding the Waiver, please contact Mark Gallant, Chris Raphaely, or J. Nicole Martin.