Pennsylvania Medicaid History and Facts

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Initial Medicaid Implementation: Pennsylvania began their Medicaid program on January 1, 1966, the first available opportunity for states to establish their Medicaid programs. Prior to the passage of the Medicaid program, Pennsylvania participated in the Kerr-Mills program. Collectively with four other states, Pennsylvania and these other large states accounted for nearly 2/3rds of the expenditures of the Kerr-Mills program. Pennsylvania set an annual income level of $4,000 for a family of four, making the program inaccessible to many low-income residents. The state’s Medicaid program was initially called “Pennsycare.” In the first year of the program’s implementation approximately 6% of the population or 583,000 people enrolled in Medicaid in the state. Following the reforms in 1967 that set a limit of 150% of AFDC levels for federal reimbursement, Pennsylvania decided to reduce eligibility to this level although Pennsylvania avoided that cutback by raising the AFDC levels in the state essentially maintaining eligibility levels and federal reimbursement. Under a proposed change that would have lowered the amount of federal reimbursement the state of Pennsylvania would have lost $30.5 million in the first year. One major change that Medicaid brought in the state was a reduction in the amount of uncompensated care. According to the Pennsylvania Medical Society, physicians provided more than $41 million in uncompensated care in 1960.

Key Medicaid Political Issues: Pennsylvania has had a generous benefit for children under their Children’s Health Insurance Program. The program would become a model for the federal legislation that would begin the CHIP program. In 1992 then Governor Robert P. Casey signed a law into the state that would provide health coverage to higher income families that are too wealthy to be eligible for Medicaid but uninsured because they do not make enough to afford health insurance. One sponsor of the bill in the state legislature included Alyson Schwartz who would later go on to become a Congresswoman in the US House and become an active leader in shaping CHIP policy in the House. Governor Corbett opposed changes to the CHIP program that would require certain income eligible enrollees to enroll in Medicaid rather than in the CHIP program. Ultimately, the governor conformed with the proposal and certain changes were made to the Medicaid and CHIP program to ensure that people who had received CHIP and moved to Medicaid benefits were not seeing a reduction in benefits. The state has also had a focus on providing wrap around services for psychiatric and substance use disorder. In 1997 the state implemented an integrated and coordinated care plan that carved out behavioral health services

Medicaid Expansion Implementation: When the Medicaid expansion went into effect and states were making decisions on whether or not to expand coverage, Pennsylvania had a Republican governor. Governor Corbett had been opposed to Medicaid expansion. He conceded in supporting Medicaid expansion, in part because his term was over in 2014 and several other Republican controlled states had expanded through a waiver. The early version of Corbett’s proposal included a work requirement that was later dropped after receiving a letter from the Obama Administration informing the governor that it would not approve a work requirement. The Republican governor nominee criticized Corbett in the general election for vetoing this policy. In August of 2014 the Centers for Medicare and Medicaid Services approved the state’s Medicaid expansion with a waiver that included benefit package changes for the expansion population and created new managed care options for Medicaid expansion enrollees. The plan would phase in premiums and additional cost-sharing in the second year of the plan. The expansion was implemented on January 1, 2015. Democratic governor Tom Wolf was elected in November of 2014 and on his first month in office, the Governor announced that the state would transition from the waiver expansion to an expansion without the complexities of the waiver. The plan would move the people who gained coverage from newly created managed care plans to managed care plans that existed through the Medicaid program prior to the implementation of the waiver.
General facts about Pennsylvania Medicaid:
Medicaid program name: Medical Assistance
CHIP Program name: CHIP
Separate or combined CHIP: Separate
Medicaid Enrollment: 2.9 million (2018 estimate)
Total Medicaid Spending: $28 billion (FY 2017 estimate)
Share of total population covered by Medicaid: 19%
Share of Children covered by Medicaid: 37.5% (estimate)
Share of Medicaid that is Children and Adults: 62%
Share of Spending on Elderly and people with disabilities: 79%
Share of Nursing Facility Residents covered by Medicaid: 66% (estimate)
FMAP: 52.25%
Expansion state: Yes
Number of people in expansion: 751,000
Work Requirement: No


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