Healthy PA Can't Cure Obamacare Disease

Gov. Corbett today unveiled a “Healthy PA” plan, calling for reforms to Medicaid while also accepting federal “Medicaid expansion” funds to buy insurance for 500,000 or more individuals on the Obamacare federal health insurance exchange.

While we agree with Gov. Corbett that reforming Medicaid is essential, the Healthy PA proposal falls short of providing meaningful reform in exchange for putting more people and more money into Obamacare’s house of cards.

What’s in the plan? Healthy PA makes changes to the current Medicaid program and creates a new entitlement program where recipients will receive premium assistance. Here are the highlights:

Reduces cap on utilization of certain services, effectively reducing the funds Managed Care Organizations have to pay doctors.
Reduce the number of benefit packages in traditional Medicaid from 14 to 2.
Requires Medicaid recipients to pay a share of premiums on a sliding scale, from $1 to $25 month.
Requires recipients to make co-payments on doctor visits.
Requires job search for recipients.

In exchange for these reforms, which require federal approval, the state would accept Medicaid expansion dollars, but provide a “private option”:

Newly eligible recipients (the Medicaid expansion population) along with some current Medicaid recipients would get private health coverage via the Obamacare exchange.
Federal tax dollars would pay most of the premiums. Under Obamacare, the federal government would pay 100 percent of the costs for first three years, then 90 percent with states picking up the remaining 10 percent after that.
Private option enrollees would have same premium sharing, co-pay, and work search requirements as those on traditional Medicaid.

What’s wrong with this approach? Taking more resources away from the truly needy to provide for the insured fails to offer the real reform Pennsylvania needs. The plan grows the welfare rolls by encouraging another 500,000 (or more) Pennsylvanians to lean on taxpayers for their premiums.

Additionally, federal funds are not free, but paid for by taxpayers. Expanding Medicaid in Pennsylvania will add $43 billion to the federal deficit over the next decade according to the Kaiser Family Foundation.

Moreover, premium assistance via the federal health insurance exchange will cost taxpayers more than traditional Medicaid, as documented in Arkansas. The Congressional Budget Office estimates such a plan will cost an additional $3,000 per enrollee, but no one really knows the true cost.

As Gov. Corbett and Secretary Mackereth have noted, Medicaid spending is unsustainable, and we must fix the system first. Here are some alternatives to Healthy PA that avoid creating a bigger and more expansive bureaucracy envisioned by the government unions and other pro-Obamacare organizations.

Refuse Obamacare’s expansion of entitlement programs.
Give current Medicaid patients a choice of providers. States such as Florida, Kansas and Louisiana have empowered traditional Medicaid patients to choose the provider that work best for them. In Florida, for example, patients can choose from up to 13 different health plans. Between 70 percent and 80 percent of patients in Florida’s program actively choose their health plan.
Reward Medicaid patients for healthy behavior. Patients in Florida’s program can earn up to $125 per year for preventive services and disease management.

By resisting the federal government’s attempts to woo Pennsylvanians into Obamacare’s house of cards, we can pursue reforms that will both expand access to health care and reduce the burden on taxpayers.