Is Pennsylvania A Sign that More Customized Medicaid Plans Are On the Way?

Yesterday’s announcement that Pennsylvania will become the 27^th state to expand Medicaid under the Affordable Care Act (ACA) was closely watched in both healthcare and political circles, for it shows further accommodation to both local health needs and political considerations.

Will Pennsylvania’s deal with the Centers for Medicare and Medicaid Services (CMS) be the last, coming after Arkansas and Iowa? Or is it a sign that Medicaid, which has always combined federal mandates with some local flavor, will continue to shift with the political winds in the states?

The jury is still out. However, if the Obama Administration wants to continue to see numbers of enrollees climb and support for the ACA solidify to the point that repeal becomes impossible in the next Congress, it is likely to accept tinkering from Republican governors or legislators in the near term. The Pennsylvania move has interesting political considerations, given that Republican Gov. Tom Corbett has been considered vulnerable in his re-election bid against his Democratic opponent, Tom Wolf. CMS’ move comes as polls show Wolf has a 25-point lead over Corbett.

As recently as March, a commentary published by the Kaiser Family Foundation saw approval for Pennsylvania’s plan as unlikely. As reported last fall in Evidence-Based Oncology, the Pennsylvania proposal and the original Arkansas "private option" both rely on private sector components. In Arkansas, Medicaid funds can be applied to the purchase of private insurance. Pennsylvania already had private-sector involvement in managed care of its Medicaid coverage.

To some, Arkansas’ plan might be considered an unqualified success. A survey by Gallup found it led the nation in reducing the ranks of the uninsured. But conservative lawmakers in Arkansas have come close to unraveling the program, and its Legislature has discussed asking for additional concessions before renewing its waiver with CMS. Ironically, however, as Vox’s Sarah Kliff reported this week, Arkansas’ unique configuration kept the sickest patients in the public Medicaid program and thus, premiums are set to drop slightly for those who signed up for private insurance under Medicaid expansion.

State-level customization of Medicaid is not without consequence, and CMS has shown it has limits to its flexibility. Indeed, a key concession that paved the way for Pennsylvania’s approval was the Corbett Administration’s abandonment of a proposal that would require unemployed Medicaid recipients to show they are looking for work. Healthcare advocates cried foul, and CMS said no. Instead, the Corbett plan calls for premium savings for those who can show they are looking for work.

One state worth watching is Virginia, where first-year Democratic Gov. Terry McAuliffe has pressed hard for expansion and has met resistance from the GOP-controlled Legislature. A special session is set for Sept. 18 on the issue.

In all likelihood, the continued differentiation in the program will cause researchers to examine what the many shades of Medicaid mean for healthcare outcomes. Just this week, a study published in the journal Cancer showed that higher Medicaid reimbursement levels for office visits meant beneficiaries were more likely to be screened.

And that’s not counting the difference in health outcomes that will occur between populations in states that expanded Medicaid in some form, compared with those that refused expansion entirely.

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