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Medicaid Expansion Plans Move Forward in a Few States

By Rebecca Adams, CQ HealthBeat Associate Editor

March 7, 2014 -- New Hampshire Democratic Gov. Maggie Hassan hopes to sign a Medicaid expansion bill by the end of the month after the state Senate approved it this week. The state House, which previously passed Medicaid expansion legislation, may clear the bill as early as next week and give Hassan her wish.

New Hampshire has the best chance of enacting a Medicaid expansion out of the states that are debating the issue. In Virginia, Democratic Gov. Terry McAuliffe is touring the state to build support for broadening Medicaid, which he hopes will persuade resistant House Republicans to accept it. Utah GOP Gov. Gary Herbert has put forward a plan called Healthy Utah that is generating discussions.

In Pennsylvania, Republican Gov. Tom Corbett this week made changes designed to convince federal officials to approve his Healthy Pennsylvania plan. Corbett says his waiver request does not require legislative approval.

The efforts in all of the states would build on a model that federal officials first approved last year in Arkansas, which uses Medicaid dollars to buy private insurance offered through the new marketplaces created by the health law. Centers for Medicare and Medicaid Services officials also accepted similar expansion initiatives in Iowa and Michigan.

Action in New Hampshire

In Concord, N.H., the state Senate overcame previous Republican resistance by passing an expansion measure by a 18-5 margin. Seven Republicans joined Democrats in supporting it.

The legislation now goes to the state House, which is likely to pass it within the next couple of weeks.

Hassan has been pressuring Republicans to pass a bill and is eager to sign the expansion. Once she has done so, she will send the plan to CMS officials for approval.

The proposed legislation has an escape clause: it would sunset at the end of 2016.

The bill would allow adults younger than 65 who earn up to 138 percent of the federal poverty level to qualify for coverage. The first phase of the plan would help pay for job-based coverage for individuals. Another group of about 38,000 residents would be covered by the state's Medicaid program in the summer.

Moving Toward Compromise in Pennsylvania

In Pennsylvania, Corbett scaled back some requirements he had sought to make relatively healthy Medicaid beneficiaries to look for work. In the plan he sent to the CMS officials for review in mid-February, people who get Medicaid benefits would have to complete some job search activities.

In a March 5 letter to Health and Human Services Secretary Kathleen Sebelius, Corbett said he wants to amend the proposal to be a pilot program for one year.

The governor—who is facing re-election—is deeply involved in negotiations with federal officials now over his waiver request. The early stages of the talks started 11 months ago. State officials are hopeful the administration will approve some version of the plan this spring.

Beneficiaries in the newly proposed pilot program would have an incentive to either have a job or, if they work less than 20 hours per week, to look for another position because they would get discounts on their premiums or co-pays.

The discounts would vary depending on how many hours a week the person works. At a maximum, people working a 30-hour workweek or more would get a 40 percent reduction in their costs. People working less than 20 hours per week would have to show they are searching for another job or participate in activities, such as getting their GED high school equivalent certificate.

Corbett had already changed his original plan to charge people premiums. Under the version he sent to federal officials in February, beneficiaries will pay co-pays for the first year, as other Medicaid beneficiaries had done under the existing program. In the second year, people with income above 100 percent of the poverty line "will be required to pay a nominal payment toward a monthly premium," according to the waiver document. Those beneficiaries would not have to pay co-pays except for a $10 fee for emergency room use for care that was not an emergency.

All of the details are up for discussion, said Jennifer Branstetter, director of policy and planning for the administration, who spoke with CMS Deputy Administrator Cindy Mann this week and has volunteered to come to Washington in the next few weeks to discuss the request.

Branstetter portrayed the waiver request as a "true test" for the Obama administration.

"They said they willing to give states flexibility," she said. "We hope the Obama administration holds true to its word and will give Pennsylvania a chance. We're saying give us flexibility and let us show you the data after a year."

She said state officials believe that more Medicaid recipients will be motivated to work more if the pilot program is approved.

Corbett pulled Sebelius aside for a few minutes last week to talk about the plan when the nation's governors were invited to the White House for a broader meeting. CMS officials are non-committal about whether they will require additional modifications.

"CMS will examine this latest proposal, and will consider input during the public comment period and provide technical assistance to Pennsylvania on their waiver application before making a decision," said CMS spokesman Aaron Albright, adding that in Pennsylvania an expansion would mean coverage opportunities for hundreds of thousands of people.

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