Gov. Corbett Should Accept Real Medicaid Expansion

More than 500,000 Pennsylvanians need health care coverage now

This is a guest column.

by State Rep. Frank Dermody

It’s easy to get caught up in – and turned off by – the political mudslinging that has dominated the federal Affordable Care Act, commonly known as ObamaCare.

What often gets lost in all the political noise is the fact the law will help millions of Americans – including hundreds of thousands of Pennsylvanians – get access to affordable health care for themselves and their families.

Two issues related to ObamaCare are in the news lately, and they’re both important.

First, the new Health Insurance Marketplace, www.healthcare.gov, was launched this month, allowing people, for the first time, to shop online for a health insurance plan that works best for them.

The second issue is Medicaid expansion – the option under the new law for states to expand insurance to a larger group of working people with less income who currently don’t qualify for Medicaid but also can’t afford private insurance on the Marketplace.

Under the Affordable Care Act, the federal government will pay for 100 percent of the cost of Medicaid expansion for the first three years. Starting in 2017, the federal share will gradually drop to 90 percent of the cost, meaning states will pay no more than 10 percent of the costs annually after the first three years.

Twenty-five states have accepted Medicaid expansion, including neighboring New York, New Jersey, Delaware, Maryland and West Virginia.

Here in Pennsylvania, Gov. Tom Corbett has refused to expand Medicaid, despite the fact that it would provide health care coverage for more than a half-million uninsured, working Pennsylvanians, and despite the fact that it would bring an infusion of tens of billions of federal dollars into our state and local economies.

Instead, Corbett has chosen a needlessly complicated – and potentially more expensive – approach that would send federal Medicaid dollars to private insurance carriers, while also adding unnecessary, and likely illegal, hurdles for Pennsylvanians to get coverage.

Even if Corbett receives federal approval, which is by no means guaranteed, it will likely take months of negotiations. That means that those 500,000-plus Pennsylvanians, who need health care coverage, will have to wait while their neighbors in other states start getting covered as of Jan. 1, 2014, using Pennsylvanians’ federal tax dollars.

With zero cost to the state for the first three years, there’s no reason to delay Medicaid expansion. Corbett can still negotiate with the federal government over his Medicaid privatization plan, while hundreds of thousands of Pennsylvanians get the health care coverage they need.

It’s important to understand who those uninsured Pennsylvanians are.

The vast majority of people who would receive coverage through Medicaid expansion are working men and women who either do not have health insurance provided by their employer, or they can’t afford it. We’re talking about restaurant workers, child care workers, cashiers, home health aides and many other hardworking Pennsylvanians.

They need health care coverage for themselves and their families. They cannot afford to wait.

Gov. Corbett should do the right thing for Pennsylvanians and say “yes” to true Medicaid expansion.

State Rep. Frank Dermody serves as Democratic leader of the Pennsylvania House of Representatives. He represents the 33rd Legislative District in Allegheny County.

 

Health Law Saves Consumers by Requiring Insurers to Spend Premium Dollars on Medical Care

By Chris Lilienthal, Third and State

Medical Loss Ratio ExplainedA key reform in the Affordable Care Act requires health insurers to spend 80% to 85% of premium dollars directly on medical care or quality improvement expenses as opposed to other administrative costs, marketing, or profits. If an insurer does not meet the standard, it must provide rebates to consumers or businesses.

Insurers issued $1.1 billion in rebates to nearly 13 million consumers for 2011, the first year the rule was in effect, and are expected to return more than $500 million in rebates to 8.5 million consumers for 2012. The 2012 figures include nearly $6.9 million that will be returned to 123,581 Pennsylvania consumers — an average of $77 per family.

These rebates are among the more tangible ways that consumers have benefited from the law so far, but it is important to remember, as researchers with the Kaiser Family Foundation recently noted, that rebates represent only a portion of the savings to consumers from this provision, known formally as the "Medical Loss Ratio" Rule (MLR):

The primary role of an MLR threshold is to encourage insurers to spend a certain percentage of premium dollars on health care and quality improvement expenses (80 percent in the individual and small group market and 85 percent in the large group market). The MLR rebate requirement operates as a backstop if insurers do not set premiums at a level where they would be paying out the minimally acceptable share of premiums back as benefits…

Consumers and businesses, therefore, can realize savings in two ways as a result of the MLR requirement: by paying lower premiums than they would have been charged otherwise (as a result of lower administrative costs and profits), or by receiving rebates after the fact.

Final Pa. Budget Fails to Make Up Lost Ground

By Sharon Ward, Third and State

The Pennsylvania Budget and Policy Center has released a full detailed analysis of the 2013-14 state budget plan spending $28.376 billion, roughly $645 million (or 2.3%) more than in the 2012-13 fiscal year.

Governor Tom Corbett signed the budget into law late in the evening of June 30, 2013. Overall, the plan is $64 million less than the Governor proposed in February, reflecting nearly $113 million in reduced spending for public school pensions and school employees’ Social Security payments along with a shift of $90 million in General Fund spending off budget to other funds.

2013-14 General Fund Summary

The plan includes a small increase to basic education funding, $122.5 million overall, with $30.2 million allocated to 21 school districts through a supplemental allocation, on top of the $90 million increase in the Governor’s proposal.

After many years of cuts, most programs received small increases in the Governor’s proposed budget, which remained in the final plan.

Changes to pension benefits for current employees, the cornerstone of the Governor’s original budget proposal, did not occur. The Legislature does not seem inclined to tamper with benefits for current employees. A proposal to move to a 401(k)-style retirement plan for new employees gained traction later in the session but was not adopted. This proposal may return in the fall.

Also abandoned was an $800 million education initiative to be funded through the sale of state liquor stores. While the privatization vs. modernization debate held center stage until the last week of the session, the school funding component was quickly abandoned and was not part of legislative proposals. Privatization is likely to be considered in the fall, as well.

For the first time in two years, there were no major cuts to services for vulnerable Pennsylvanians; however, a bill that would expand Medicaid coverage in 2014, a state option under the federal Affordable Care Act, was left undone. Legislation including the Medicaid expansion won bipartisan support in the Senate, but the House stripped out the expansion provision from the bill. When the bill returned to the Senate, a last ditch effort to restore the Medicaid expansion provision failed in a dramatic Senate committee vote on July 3.

Finally, a transportation funding package that would repair crumbling infrastructure and give a much needed shot in the arm to Pennsylvania’s flagging job growth failed to pass the House, despite overwhelming support in the Senate.

Get all the details from PBPC's budget analysis.

Lives Are on the Line in PA’s Medicaid Expansion Debate

By Chris Lilienthal, Third and State

Cover the Commonwealth: Lives on the Line RallyLast week, hundreds of people from across Pennsylvania took the Capitol by storm to put faces to the debate over expanding Medicaid health coverage in Pennsylvania.

The "Lives on the Line" rally featured a number of speakers who talked about the stress of working full-time without health insurance. One woman named Petrina has diabetes, but her employer doesn't offer health insurance. She had to fight back tears as she talked about the struggle to control her insulin. She is understandably terrified.

Mary Lou struggles to get through the days, given that she's needed new glasses for years.

Cheryl from Washington County recently incurred thousands of dollars in ER charges and has no idea how she'll ever pay it back.

And it goes on…

Cover the Commonwealth: Lives on the Line RallyAll of the speakers would have the security of knowing they can see a doctor when they get sick if Pennsylvania opted to take a federal opportunity provided by the Affordable Care Act (ACA) to expand Medicaid coverage in 2014 to adults with incomes up to 138% of the federal poverty line (roughly $32,000 for a family of four).

The federal government will pay 100% of the cost of new enrollees for the first three years—2014, 2015 and 2016—and will cover 90% of the costs by 2020.

Hundreds of thousands of Pennsylvanians will be eligible for health coverage under expansion, cutting the state's uninsured rate in half. Acting on this opportunity will create jobs, strengthen Pennsylvania’s economy, and make its citizens healthier and more financially stable. Get all the facts about the expansion in a new fact sheet prepared by the Pennsylvania Budget and Policy Center (PBPC).

Despite the tremendous upside, Governor Corbett has yet to decide on whether the state will expand, and there are only a couple weeks left before the Legislature breaks for the summer. That’s why the Cover the Commonwealth Campaign (of which PBPC is a member) organized last week’s Capitol rally.

And it was a success, generating good press coverage. The Governor’s office and legislators took notice, and the crowd was fired up. But more needs to be done to keep the pressure on Harrisburg to do the right thing.

You can help by calling your state legislators at 1-800-515-8134 and the Governor at 717-787-2500. Tell them: My name is ___ and I'm calling because Pennsylvania needs to accept federal funding to expand Medicaid. Thank you.

Republican Governors Opt-In to Medicaid Expansion

By Sharon Ward, Third and State

There is growing bipartisan agreement that the optional expansion of Medicaid provided by the Affordable Care Act is too good an opportunity to pass up.

This month, the Governors of Arizona and North Dakota, both Republicans, announced their intention to opt-in to the Medicaid expansion, joining their counterparts in Nevada and New Mexico. To date, 14 states have decided to expand Medicaid in 2014, and another seven are leaning toward expansion. Pennsylvania remains among the 21 undecided states.

Support for Medicaid Expansion Growing

Here’s what Arizona Governor Jan Brewer had to say about Medicaid:

By agreeing to expand our Medicaid program just slightly beyond what Arizona voters have twice mandated, we will:

• Protect rural and safety-net hospitals from being pushed to the brink by their
   growing costs in caring for the uninsured;
• Take advantage of the enormous economic benefits – inject $2 billion into our
   economy – save and create thousands of jobs; and,
• Provide health care to hundreds of thousands of low-income Arizonans.

Saying ‘no’ to this plan would not save these federal dollars from being spent or direct them to deficit reduction. No, Arizona’s tax dollars would simply be passed to another state – generating jobs and providing health care for citizens in California, Colorado, Nevada, New Mexico or any other expansion state … With this move, we will secure a federal revenue stream to cover the costs of the uninsured who already show up in our doctor’s offices and emergency rooms … Weigh the evidence and do the math. With the realities facing us, taking advantage of this federal assistance is the strategic way to reduce Medicaid pressure on the State budget. We can prevent health care expenses from eroding core services such as education and public safety, and improve Arizona’s ability to compete in the years ahead. I’m committed to doing this, and I want you on my side. Let’s work together in an atmosphere of respect and do what is BEST for Arizona.

For Pennsylvania, the expansion of Medicaid is projected to bring in $17 billion in new federal investments by 2019, while expanding coverage to between 482,000 and 683,000 uninsured adults.

When Governor Corbett gives his budget address on February 5, he will offer a glimpse into the state’s plans to take advantage of this opportunity. Opting-in will create jobs, strengthen our health care system and provide health coverage to working parents, veterans, and seniors.

Governor Corbett and the Pennsylvania General Assembly should consider the benefits and savings that come with a Pennsylvania Medicaid expansion as well as the price of forgoing this opportunity – fewer jobs, a weakened health care delivery system and hardworking people without affordable insurance.

Mind the gap: Opting Out of Medicaid Expansion Leaves Low-income Families Behind

By Michael Wood, Third and State

Federal health care reform is moving forward thanks to the U.S. Supreme Court’s ruling last year – and it is a great deal for Pennsylvania. Unless the state decides to “opt out,” Medicaid coverage will be expanded to include many Pennsylvanians who are uninsured.

One group that will benefit immediately are parents with incomes up to 133% of the federal poverty level ($25,390 for a family of three). The benefits don’t end there: others who don’t receive health coverage through their work will be able to buy insurance on a competitive health marketplace or exchange – making coverage more affordable.

However, if Governor Corbett prevents the Medicaid expansion, it will create a coverage gap for families between 46% and 100% of poverty, as the chart below shows (click on it for a larger view).

Those families between 46% and 100% of poverty earn too much to qualify for Medicaid (for a family of three, this means earning over $8,781 but less than the federal poverty line of $19,090). These families won’t receive Medicaid coverage, and they won’t receive subsidies to buy health coverage.

We all benefit when more people have health coverage. Let’s make the right decision in Pennsylvania and expand Medicaid coverage.

Will Pennsylvania Take Full Advantage of Health Reform?

By Chris Lilienthal, Third and State

With the election decided, it is now clear that the Affordable Care Act is here to stay. That’s great news for Pennsylvanians, some of whom have already begun to benefit from the health reform law, and many others who will see more gains as major provisions take effect in 2014.

As Judy Solomon writes at the Off the Charts Blog, a key provision of the law will allow states to expand Medicaid to cover low-income adults earning up to 133% of the poverty line, with the federal government covering most of the costs:

The question now is whether some states will squander this opportunity to cover millions of uninsured Americans.

Coverage for more than 11 million poor, uninsured adults is at risk if states don’t expand Medicaid, according to the Urban Institute.

Status of Health Reform Medicaid Expansion

As you can see in the chart above, Pennsylvania is among the states that have not made a clear decision on the Medicaid expansion. 

Failing to expand Medicaid would squander the opportunity to boost our state economy. The Kaiser Commission on Medicaid and the Uninsured estimates that the Medicaid expansion in Pennsylvania will amount to at least $17 billion in additional federal dollars invested in the state between 2014 and 2019. By contrast, as Solomon writes, the “Congressional Budget Office estimates that if all states adopt the expansion, they will spend only 2.8 percent more on Medicaid from 2014 to 2022 than they would have spent without health reform.”

Failing to expand Medicaid would also cost Pennsylvania real money that would otherwise be saved by reducing what the state spends to provide health care in emergency rooms and health clinics to people without insurance. 

Governor Corbett and the Legislature should take steps to expand Medicaid in 2014. It will help thousands of working parents and other adults in Pennsylvania get the quality health care they need and give the state’s economy a real boost.

Uncompensated Care Costs Rise at PA Hospitals

By Chris Lilienthal, Third and State

More than a year ago, the Corbett administration decided to end the state’s adultBasic program, which provided affordable health insurance to about 40,000 low-income Pennsylvanians who were unable to obtain coverage from an employer or through other programs.

We worried at the time that many of those newly uninsured would delay treatments until a health condition snowballed into a more serious and costly problem, sending more people to the emergency rooms of our community hospitals.

The Pennsylvania Health Care Cost Containment Council released a report this week showing that uncompensated care costs at hospitals did in fact rise in the 2010-11 fiscal year, when adultBasic ended. Uncompensated care totaled $990 million – an 11% increase over the prior year.

Dave Wenner at the Harrisburg Patriot-News has more:    

[Hospitals’] average operating margin was 5.58 percent, up from 4.37 percent the previous year. That means the average hospital had a profit of $5.58 for every $100 in revenue… 

“We see the number of hospitals that lost money dropping,” said Joe Martin, the executive director of the cost containment council. “We see the margins rising to a healthy level. That’s all good news. 

“The news that’s a little concerning is the spike in the uncompensated care. And there are still a lot of hospitals, particularly the small- to medium-sized hospitals, that are struggling financially. So there is really two sides to the story.”

But the Hospital & Healthsystem Association of Pennsylvania painted a much darker picture, saying the recent numbers “mask” a bleak long-term reality of hospitals struggling against state and federal budget cuts, while straining to provide a safety net for uninsured and under-insured patients. 

Local hospitals told the Patriot that the loss of jobs and health insurance in the tough economy, as well as high deductibles and other tactics to shift more health care costs onto patients, played a role in rising uncompensated care costs.

And so did adultBasic’s end, as Sharon Ward of the Pennsylvania Budget and Policy Center noted in the story:

The loss of coverage, Ward said, forces people to wait until they are sick, when they need a maximum level of care and obtain it in the most expensive setting. Then their costs get shifted to people with insurance and government programs, said Ward, who is an advocate for government programs to provide insurance for people who can’t afford coverage. 

Let the Games Begin: PA Senate Announces Details of Budget Proposal

By Sharon Ward, Third and State

Action on the state budget began in earnest Monday with state Senator Jake Corman, chairman of the Appropriations Committee, releasing important details on the Senate budget plan that will be advanced this week.

The proposal would increase Governor Tom Corbett’s budget proposal by $500 million, with total spending rising from $27.15 billion to $27.65 billion for 2012-13. The Senate plan rejects $191 million in fund transfers and new revenue and proposes new spending cuts of $165 million. Those spending reductions were not yet detailed.

According to a Capitolwire.com report (subscription required), the Senate budget plan:

  • Restores $245 million to higher education;
  • Does not include block grants for county human services or basic education;
  • Reduces the county human services funding cut from 20% to 10%;
  • Restores $50 million to Accountability Block Grants (which fund quality pre-kindergarten and full-day kindergarten); 
  • Restores $14 million in cuts to early childhood education;
  • Reduces the transfer from the Keystone Recreation, Park and Conservation Fund (Key ’93 Fund) from $38 million to $19 million; 
  • Cuts PHEAA by $8 million rather than the $19 million proposed by the Governor; and
  • Maintains $59 million for the CURE health research program in the Tobacco Settlement Fund.

Senator Corman, who announced the details, said the Senate wanted to take a step back on the proposed education block grant because “a lot of people are opposed to it” and will wait to get more feedback from school districts. On the human services block grant, Corman said, “we did not get into whether it is block granted or not.” 

It’s not clear that a 10% cut in county human services will seem like much of a victory to the folks fighting that battle. And since House leaders had been talking $100 million for Accountability Block Grants, there may be some trading to come. It’s not clear whether we can get a spend number higher than $27.615 billion so there is a lot more work to be done.

Will welfare programs get cut again?

The Senate plan includes $40 million in revenue from “recalculating Social Security and welfare costs.” The Social Security side is what school advocates have identified as double counting on charter school Social Security payment. The $165 million in unspecified spending cuts, plus the welfare savings, could be a cause for concern.

The preliminary revenue estimate released by the Independent Fiscal Office (IFO) last week provided crucial cover to state lawmakers who have been hammered for months in Harrisburg and in the press about the consequences of the Governor’s proposed cuts. The IFO, which was established precisely for the purpose of providing a revenue estimate “independent” from the Governor, projects that Pennsylvania will end the current fiscal year with about a $400 million balance, and raise $400 million more than originally projected in the new fiscal year.

To make the Senate plan more palatable to lawmakers, especially those in the House loathe to spend a dime more even if bridges are falling down around them, Senator Corman argued that the spending plan would meet TABOR targets. That, of course, should send shivers down all of our spines.  

TABOR – the Taxpayer Bill of Rights – is the failed experiment in Colorado, which limited state spending to a formula of inflation plus population growth. If tax collections run higher than that, officials are supposed to send the money back to taxpayers as a rebate. In 2005, voters in Colorado passed a referendum suspending this crazy system for five years. 

Why would voters turn down a tax rebate check? I guess they tired of the gimmick. The last time I looked, local governments had passed 1,400 tax increases to make up for state funding cuts.

Nowhere to Go, More Addicts on the Street and a Ringing Irony

Based on blog posts by Chris Lilienthal originally published here and here at Third and State.

The Philadelphia Inquirer reports this morning on the impact of Pennsylvania Governor Tom Corbett’s proposed budget cuts on the lives of people in Southeastern Pennsylvania. Who is getting hit? Adults with disabilities, the homeless, people with mental-health illnesses, HIV patients needing hospice care, children aging out of foster care, and seniors, among others.

Miriam Hill, The Philadelphia InquirerPeople who will be affected by Corbett’s cuts:

Brittany Stevens doesn’t talk a lot, but she’s a bit of a social butterfly. She was a prom queen and, after a recent performance of the musical Fela!, she spontaneously hugged the dancers, nearly tackling them in excitement.

But Brittany, 21, who is disabled and suffers from seizures, incontinence, hearing loss, and other problems, spends most of her days alone in her North Philadelphia home, while her mother, Harlena Morton, goes to work as a high-school counselor.

Morton had hoped to find Brittany a job in a workshop that employs disabled adults. Now that Gov. Corbett has proposed large cuts to social services programs, Morton fears that Brittany and thousands like her will never get off waiting lists for those spots and for other services…

In Philadelphia, the cuts total about $120 million, not including reductions in medical care, city officials say; across Pennsylvania, $317 million, according to state officials.

The Governor’s 2012-13 budget proposes to completely eliminate the General Assistance Program, which provides a time-limited, modest $205 per month benefit to people who are sick or disabled, completing addiction recovery programs or children who would otherwise be in foster care. Again, from the Inquirer:

Michael Froehlich, a lawyer for Community Legal Services, who opposes eliminating general assistance, says the programs are a lifeline for many people, including about 800 children being taken care of by people who are not family members. Many of the caretakers are “Good Samaritans,” and without them, the children likely would be in foster care, which is significantly more expensive, Froehlich said.

“General assistance is an efficient, relatively speaking, way to take care of Pennsylvania’s most vulnerable citizens,” he said.

Philadelphia City Paper delves even deeper into the likely fallout from eliminating General Assistance. The long and short of it is that fewer people living on the edge will get the help they need to get back on their feet. And that could produce some public safety concerns.

For an estimated 1,000 to 4,500 recovering addicts in the city on any given day, the only option for getting clean in Philadelphia is checking into one of more than 300 informal recovery houses scattered across Kensington, Frankford and North Philly. It’s a fragile network, administered mostly by former addicts and funded largely through residents’ welfare dollars, in particular the nine-month, one-time General Assistance (GA) payments offered by the Commonwealth.

In Gov. Tom Corbett’s proposed budget for the coming fiscal year, GA is eliminated altogether. Advocates say the impact could be devastating, affecting 34,843 Philadelphians who receive GA money (including people with disabilities and survivors of domestic violence) and pushing thousands of addicts out onto the street.

“If you cut all this, the bottom line is that the streets are going to overflow with people,” says Anthony Grasso, co-owner of the Next Step recovery house in Frankford. “Do you know how many people are going to commit more crimes to get what they need?”

Finally, as Supreme Court arguments on the constitutionality of the Affordable Care Act wrapped up Wednesday, I found this editorial from the Harrisburg Patriot-News particularly interesting.

The ringing irony about this week’s U.S. Supreme Court challenge to the Affordable Care Act is that the law’s core principles were all, originally, conservative. And when they were first promoted, almost no one said they were unconstitutional. …

As late as 2007, Democrats and Republicans introduced a bipartisan bill that included an individual mandate – still seen as an essentially conservative idea. [Former U.S. House Speaker Newt] Gingrich in 2007 argued that “citizens should not be able to cheat their neighbors by not buying insurance, particularly when they can afford it, and expect others to pay for their care when they need it.” 

In other words, the individual mandate is not creeping socialism. It is the opposite. It is about requiring citizens to take individual responsibility in the arena of health care, where the inaction of some costs taxpayers billions of dollars each year.

Food for thought as you listen to commentators, activists and politicians rail against a law that ends coverage bans for pre-existing conditions and other insurer abuses, provides better preventatives care to everyone, ensures children can see a doctor when they get sick, and gives families the tools they need to take responsibility for their health coverage.