Commentary
As I am sure many of you have heard, Governor Corbett will be making an announcement today regarding his broad health policy proposal—Healthy Pennsylvania—focused on concepts related to access, quality, and affordability. The Administration is planning a comprehensive roll out of the proposal this week and the Governor will be traveling across the state to highlight various components of his proposal.  A concept document is under development and will be shared this week with HHS.  The Administration believes they do not need legislation do to most of this, but some of it may be part of the FY 14-15 budget discussions. 

Reforming the standard one-size-fits-all approach to Medicaid, Corbett’s plan instead is expected to tie benefits to need.  Sicker or frail adults will stay in a modernized Medicaid program, but healthy adults will get coverage by leveraging the health insurance exchange.  Health insurance that comes via the exchange will more closely mirror what most people in the work force get either through their employers or on their own.  It’s a similar approach taken by other states, namely Arkansas and Iowa, but with some differences.  It’s also worth noting that many reform-minded members in Congress, current House Budget Committee Chairman and former VP nominee Paul Ryan come to mind, have pushed the idea of premium support as a way to reform Medicare.  While this is by no means the same thing, it is certainly a move in that direction.

Notable because it departs from the approach of other governors, including GOP governors, is the anticipated mandate that healthy adults take more ownership of their lives by insisting on work search and job training as a condition of eligibility.  Welfare reform in the 90s proved successful because it required persons to engage in activities that would ultimately help them end or reduce their need for public assistance.  It did away with the entitlement and put some onus on persons to work or seek work as a condition of assistance.  Corbett is expecting to take a similar approach in his Healthy PA plan.  If successful, this will mean fewer people in the future will need government assistance to find affordable health care.

There are many details that need to be worked out, and CMS has not always proven a reliable ally in reforming Medicaid.  IF what we expect to be announced is the case, it’s clear that Corbett accepted some of the parameters of ACA while still pushing the envelope at times.  Monthly premiums, work search, and streamlined (though still comprehensive) benefits are all changes that will meet with some resistance from federal overseers in Baltimore and Washington.

There will be other questions too as coverage through health insurance exchanges will likely cost more than a straightforward expansion of Medicaid.  While Medicaid, especially the HealthChoices program, has helped keep costs down, it’s worth noting that the single biggest reason Medicaid is cheaper than exchanges or commercial products is that it often reimburses providers far less than those other payors.  It’s a sticky issue.  You can pay more through Medicaid and exchanges which increases the cost to taxpayers or, as is the case today, you can keep reimbursement rates low and allow providers to cost shift to other payors (that’s everyone else who purchases or receives health care outside of Medicaid) and raise the cost of health insurance. 

Legislators will rightly be nervous about the cost to finance the program.  Federal regulators will be reluctant to set new precedents.  Some in the Governor’s own party will object to the plan because it utilizes additional dollars and accepts some of the constraints imposed by ACA.  His opposition will object because they prefer the current system.  But most people will probably like, at least conceptually, embedding some personal responsibility and aligning benefits more closely with what they get in their jobs.

Concepts
What we expect to be incorporated in the Governor’s proposal includes the following:

Reforming Medicaid, which includes modifying the current Medicaid benefit package for non-elderly, non-disabled adults to be more comparable to benefit packages offered to employed groups and establishing a premium support program to enable newly eligible individuals to access health insurance through the federally facilitated health insurance marketplace. Specific details are as follows:

  • The Administration is expecting to approach “expansion” with the goal of building upon what Pennsylvania currently does well; 
  • No access to expansion without reform;
  • Expanding the insurance exchange, not Medicaid;                
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
  • Re-examining benefits packages, which are broader than most states, and using the Essential Health Benefits (EHB) silver plan as a comparative starting point or target
  • Some form of premiums for able-bodied adults, including the possibility of a cap and adding components in place for state employees (i.e., wellness visits, screenings and other incentives to lower premiums);
  • Work search requirement if the participant in physically and mentally able to do so;
  • “Private option” for new enrollees to shop in the exchange  (“Building a wall around Medicaid,” but not expanding it.;  PID estimates about 520,000 Pennsylvanians would be in the newly eligible population);
  • If the federal match goes away, so will the new program (If the state can’t meet future financial commitments (10% as the federal money drops), then the program would also be eliminated);
  • Medicaid plans will be encouraged to participate in the Exchange, but will be structured to help prevent churning and could even provide disincentives for going back into Medicaid;
  • This will not be advanced without CMS guaranteeing the Gross Receipts Tax will be protected;
  • Providers would be paid commercial rates for the Exchange participants;
  • It is still an open question whether a Medicaid exchange plan would have to take anyone shopping in the Exchange; and
  • With regard to whether Medicaid plans would have to be offered with EHB requirements at silver and other levels as mandated in federally facilitated exchanges, this is still a potential issue.

Working to make sure that all children eligible for CHIP are enrolled, which will include revitalizing the state’s marketing campaign for CHIP.

  • Covering all children, whether through Medicaid or CHIP
    • PID is going to launch an aggressive effort to promote CHIP to close the current gap in coverage;
    • Plan to eliminate the current six month “go bare” period to make it zero days;
    • Still negotiating with the federal government over whether PA can preserve CHIP; and
    • CHIP must be reauthorized this year.

Enhancing primary care opportunities, through such things as loan forgiveness, development of a state funded program to support primary care residencies, and seeking expanded federal support for primary care health centers.

  • Need to build out primary care to have “true access”;
  • SB 5 enacted to invest in clinic creation and expansion;
    • Will seek, probably through FY 2013-2014 budget, ~$100MM to put into Act 10;
  • Considering loan forgiveness for primary care doctors/nurses;
  • Pay for family care residency programs – may require legislation; and
  • Revisions to the current J3 visa program.

Addressing prescription drug abuse through better monitoring, coordination of information, and improved services to individuals addicted to prescription drugs.

  • A Representative Baker bill is expected to move in early fall to improve the current prescription drug monitoring system (the University of Pittsburgh did a study on what works in other states; the legislation is expected to authorize PA to bid out for some kind of monitoring service);
  • Make monitoring more relevant to ER doctors/doctor shopping issue; and
  • Inclusion of a drug take-back program component.

 Enhancing the use of telemedicine to help bring specialty care services to underserved communities.

  • Greater emphasis on health care technology, including telemedicine/electronic health care records and the role of the state as facilitator, and “granting out” ways to promote public health information; and
  • Use of technology to address readmission and chronic care issues.

 Supporting passage of medical liability legislation.

  • Includes benevolent gesture (or “apology rule”) legislation currently pending in the General Assembly.

 Fostering improvements in long-term care services and public health education. 

  • Emphasis is expected to be on an open, stakeholder-driven process with existing work groups currently being formed serving as the vehicle; and
  • Interest in moving forward on this issue, but not aggressively.