For Pennsylvanians in ‘coverage gap,’ new Medicaid option takes effect next week

Pennsylvania will join about two dozen other states, including New Jersey and Delaware, in expanding health coverage to hundreds of thousands of low-income residents through the state’s new Healthy Pennsylvania plan.

 

Taking effect Jan. 1, it means an estimated half a million residents in Pennsylvania could gain health insurance through a program similar to Medicaid.

Sign-ups began Dec. 1, and the state had received about 84,000 applications as of late last week. It’s unclear how many of those applications are from people who were previously uninsured.

A new option for working adults

The new option is a big deal for people who this past year fell into a “coverage gap,” according to Antoinette Kraus, director of the Pennsylvania Health Access Network.

People in the gap didn’t earn enough money — about $12,000 a year or 100 percent of the federal poverty level — to qualify for federal help in buying private coverage through the Affordable Care Act’s online marketplace.

Yet, they also didn’t qualify for Medicaid, which typically covers very low-income families (not childless adults) and people with special health needs.

“We saw a lot of working Pennsylvanians working low-wage jobs, maybe seasonal employment — anyone who had any sort of income and didn’t have a serious health problem basically could not get coverage,” said Kraus. Her group has been a strong proponent of expanding coverage and has been helping people enroll in Healthy Pennsylvania.

For those who signed up by Dec. 15, coverage kicks in Jan. 1. An individual can sign up, however, at any time. More information can be found on the state’s website www.healthypa.com or through its call center at 866-550-4355. Pennsylvania Health Access Network also runs a helpline at 877-570-3642 and a separate website: www.pahealthaccess.org/gethelp.

Health industry on board

The state’s health care industry also has a lot to gain starting next week, according to Rob Field, who specializes in health policy at Drexel University’s School of Law.

“It means billions of dollars going to hospitals and physicians and other providers. It’s estimated that Pennsylvania lost between $3 billion and $4 billion in 2014 by not expanding Medicaid,” said Field. “So it will make up for that, and that is very important to the health care industry in the state.”

Andy Carter, president of the Hospital and Health System Association of Pennsylvania, said that’s because providers give out a lot of “uncompensated care,” or care they won’t be reimbursed for because people can’t afford it.

“Annually hospitals provide about a billion dollars a year in free care to Pennsylvanians,” he said. “Hospitals are laboring under the burden of reduced payments for health care as it is.”

This new Healthy Pennsylvania option, he said, reverses that trend.

“Eventually, the great majority of Pennsylvanians will have health insurance, and with health insurance, it means that most of their medical bills will be covered,” said Carter, who estimates that hospitals in Pennsylvania could save up to a billion dollars as a result of Healthy Pennsylvania. “The resources that now go into covering the cost of that free care can go into hospital efforts to extend health care services more deeply into communities.”

Healthy Pennsylvania’s uncertain future

Effective last year under the Affordable Care Act, states have the option to fill that “coverage gap” by expanding the income eligibility for Medicaid up to 133 percent of the federal poverty level and drawing down substantial federal dollars to help fund the move.

About two dozen states, including New Jersey and Delaware, signed on. Sixteen states have opted out, according to a Kaiser Family Foundation tracker.

Pennsylvania Gov. Tom Corbett was one of a handful of governors requesting federal permission and funding to move forward with an alternative to a traditional expansion. Corbett received approval earlier this year. A main difference with Healthy Pennsylvania is that starting next year, people will have to pay monthly premiums as part of their coverage.

Gov.-elect Tom Wolf, however, has said he plans to scrap Healthy Pennsylvania and opt for a traditional expansion once he takes office Jan. 20.

Healthy Pennsylvania also includes changes to the benefits for current enrollees, moving them into “high risk” or “low risk” categories of coverage.

The federal government has granted partial approval for those changes, effective Jan. 1. Last week, Community Legal Services in Philadelphia filed a lawsuit against the state, requesting an injunction on the changes.

A judge is slated to take up the case Tuesday.