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From Health Law Daily, February 20, 2014

Pennsylvania requests Medicaid waiver for private coverage, work requirement

By Michelle L. Oxman, JD, LLM

Pennsylvania Governor Tom Corbett announced on February 19, 2014 that the state had submitted an application for approval of a demonstration project which would provide private health care coverage for the newly eligible childless, nondisabled adults who would have been eligible for Medicaid if the state had expanded the program under the Patient Protection and Affordable Care Act (ACA) (P.L. 111-148). The proposed demonstration, called “Healthy Pennsylvania,” would begin January 1, 2015, and end December 31, 2019.

Categories of newly eligible. Most adults who are at least 21 but under 65 years old who are not disabled, not pregnant, and have no children and whose incomes do not exceed 133 percent of the federal poverty level (FPL) would be eligible for the demonstration. These individuals would receive coverage through employer-sponsored insurance (ESI), if available, or a qualified health plan (QHP) offered on the federally facilitated Health Insurance Marketplace (FFM). In addition, caretaker relatives with incomes between 33 percent and 133 percent of FPL would get their coverage through the demonstration. Individuals between the ages of 18 and 21 who are not eligible for Medicaid under the state plan also would be included. A health assessment would be used to place individuals who are medically frail or otherwise at high risk for medical expenditures in a separate coverage group.

Required cost sharing. During the first year of the demonstration, the newly eligible would be responsible for copayments but not for premiums. Providers would be permitted to refuse service to individuals with incomes over 100 percent of the FPL who do not or will not pay the required copayments.

In the second year, nonexempt individuals between the ages of 21 and 64 with incomes over 100 percent of FPL would be required to pay premiums. Failure to pay premiums for three consecutive months would result in termination and a period of ineligibility. Pregnant women, individuals under age 21, and the medically frail would not be required to pay premiums. Premiums will be reduced for individuals who complete certain healthy behaviors and/or job-related activities. Beginning in the second year, there will be a higher copayment for use of out-of-network providers and a $10 copayment for nonemergency use of emergency department services. Individuals who pay premiums would no longer pay copayments except for nonemergency use of the emergency department.

Work requirement. Adults who work fewer than 20 hours per week would be required to register for work with the state employment security agency and to complete job seeking and/or job training activities. Attendance at post-secondary or technical school would excuse the individual from compliance. Completion of 12 “employment engagement” activities per month would qualify the individual for reduced or waived premiums.

A healthy behavior incentive program would afford beneficiaries another opportunity to reduce their premium and cost sharing obligations. The state expects to make significant changes to the cost sharing requirements based on its experience during the first year of the demonstration.

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