Medicaid eligibility and enrollment in Pennsylvania

ACA’s Medicaid eligibility expansion in Pennsylvania

Pennsylvania expanded Medicaid as of January 1, 2015, a year after it first became available under the ACA. Eligible enrollees were able to apply starting December 1, 2014.  In just the first two days of enrollment, 41,500 Pennsylvania residents applied for coverage under Medicaid expansion. And by 2021, more than a million Pennsylvanians were covered under Medicaid expansion (this is the Group VIII population in enrollment reports).

Initially, Pennsylvania took a modified approach to Medicaid expansion. The program was called Healthy Pennsylvania and utilized an 1115 waiver. But Governor Tom Wolf took office in January 2015, and almost immediately began the process of transitioning Pennsylvania to an unmodified version of Medicaid expansion. The Healthy Pennsylvania waiver was terminated, and Medicaid expansion has been in place in Pennsylvania, without modification, ever since (Healthy Pennsylvania and the transition to unmodified Medicaid expansion are described in more detail below).

Medicaid expansion — which is a cornerstone of the Affordable Care Act (ACA) — has played a significant role in the declining uninsured rate in Pennsylvania. According to U.S. Census data, the uninsured rate fell from 9.7% in 2013 to 5.5% in 2017, although it had increased to 5.8% by 2019, in line with the uptick in the uninsured rate nationwide. Nationwide, the uninsured rate has held fairly steady during the COVID pandemic, in large part due to the safety net created by Medicaid.

Pennsylvania, along with 37 other states and DC, offers Medicaid coverage to low-income adults as a result of the expanded eligibility guidelines created by the ACA. This has ensured that people could still have health coverage even if they lost their job or income during the pandemic.

And the Families First Coronavirus Response Act, enacted in March 2020, provides states with additional federal Medicaid funding, on the condition that they not disenroll anyone from Medicaid during the COVID public health emergency period. All states accepted that funding, so states have not been conducting periodic eligibility redeterminations during the pandemic. Medicaid enrollment has thus trended upward since early 2020, in Pennsylvania and in the rest of the country. The public health emergency is expected to end in early 2023. At that point, Medicaid eligibility redeterminations will resume, although states will differ in terms of how they manage this.

By July 27, 2015, less than seven months after Medicaid expansion took effect in Pennsylvania, 439,000 people had enrolled in the state’s expanded Medicaid program. And by March 2017, there were 716,000 people covered under Medicaid expansion in Pennsylvania. But enrollment in expanded Medicaid had dropped to just over 692,000 by November 2018, which was very close to the 680,000 enrollees that the state had initially estimated would be newly eligible for coverage under Medicaid expansion.

However, the COVID pandemic upended all previous projections; Medicaid enrollment has ballooned, nationwide, during the pandemic. In Pennsylvania, as of mid-2021, Medicaid expansion enrollment stood at 1,041,368 people, and total Medicaid/CHIP enrollment in the state stood at more than 3.5 million people by May 2022.

Despite the fact that Medicaid expansion didn’t take effect until 2015, uncompensated care costs at Pennsylvania hospitals dropped 8.6% in fiscal year 2015, which ended when Medicaid expansion had only been in effect for six months (uncompensated care includes charity care and uncollected patient debt; in states that have expanded Medicaid, uncompensated care has declined, while states haven’t expanded Medicaid have seen no significant change in their uncompensated care costs).

Lawmakers passed work requirement bill in 2018, but Governor Wolf vetoed it

Medicaid work requirements gained traction in 2018, with the Trump administration granting approval for five states’ proposed work requirements, and several more waiting in the wings. In general, the process began with a state enacting legislation calling for a work requirement, and then the state submitting a proposal to CMS, seeking federal approval to implement the work requirement. (The Biden administration revoked federal approval for work requirements in all of the states where the Trump administration had granted it.)

In Pennsylvania, lawmakers passed H.B.2138 in 2018, which would have directed the state to seek federal permission to require non-exempt Medicaid enrollees to work at least 20 hours per week (or complete at least 12 job-training activities each week) in order to maintain eligibility for the program. But Governor Wolf vetoed the legislation.

Wolf had vetoed similar legislation in 2017, and was steadfast in his opposition to Medicaid work requirements. Although the work requirements appeal to conservative lawmakers, they do not further the mission of Medicaid, which is to promote health coverage and access to medical treatment. Instead, they simply result in more people joining the ranks of the uninsured.

This became clearly evident in Arkansas, where more than 12,000 people lost their coverage within three months after the state implemented the nation’s first Medicaid work requirement. The vast majority of them lost their coverage due to failure to comply with the state’s onerous reporting requirements. Some were no doubt complying with the actual work requirement, but didn’t fully understand the reporting requirements (the work requirement in Arkansas was soon overturned by a judge, and approval for it was officially revoked by the Biden administration in 2021).

During the 2018 governor’s race in Pennsylvania, Wolf’s GOP challenger, Scott Wagner, criticized Wolf’s veto of the work requirement legislation, and noted that he would sign such a bill if he were governor. Wolf won the election, but Pennsylvania’s legislature maintained a Republican majority. Under the Biden administration, however, Medicaid work requirements are a non-starter, even if a state does enact legislation calling for a work requirement.

Expanded Medicaid in 2015

Originally, the ACA provided for expanding Medicaid to cover everyone with household incomes up to 138% of poverty in every state. Then in 2012, the Supreme Court ruled that states could not be penalized for choosing to not expand Medicaid, and a dozen states have not yet changed the eligibility guidelines for their Medicaid programs.

Many of the states that have expanded their coverage did so with an effective date of January 1, 2014. Pennsylvania, however, initially took a unique approach to Medicaid expansion and the approval process was lengthy. Former Governor Tom Corbett spent a year pitching his “Healthy Pennsylvania” program to CMS. Although he was forced to make several concessions along the way, the program received CMS approval on August 28, 2014, making Pennsylvania the 28th state to expand Medicaid.

However, in the 2014 election, Corbett lost to Democratic challenger Tom Wolf, who had long been an advocate of full Medicaid expansion under the ACA. Wolf indicated that he would not use the Healthy Pennsylvania model, and would instead expand Medicaid with no modifications.

If Pennsylvania had not opted to expand Medicaid at all (as is still the case for a dozen states as of 2022), the state would have lost out on $37.8 billion in federal funding over the next ten years.

From a waiver to straight expansion

Former Governor Corbett originally announced that the state would not move forward with Medicaid expansion, but reversed his course in late summer 2013, saying that the state was negotiating with the federal government to create its own version of Medicaid expansion (Healthy Pennsylvania). That version used federal funds to subsidize private health insurance for low-income residents instead of enrolling them in Medicaid, and added restrictions that would remove some people from Medicaid or charge them a “modest monthly premium.”

Corbett’s plan was very controversial in Pennsylvania, among lawmakers and residents alike. On March 5, 2014, a letter from Corbett to then-Secretary of HHS, Kathleen Sebelius, outlined his loosening of the requirement that Medicaid recipients be actively searching for work, but his proposal did still include a work requirement. Ultimately, the work requirement was dropped from the Healthy Pennsylvania program, but the state established a voluntary job training and career coaching program (dubbed Encouraging Employment) that could let participating enrollees have lower cost-sharing (the Trump Administration did approve Medicaid work requirements, but the Obama administration never did, and Corbett’s waiver was being considered during the Obama Administration).

Under Corbett’s plan, no premiums would be charged for Healthy Pennsylvania in 2015, but starting in 2016 the program would have charged up to 2% of income for enrollees with incomes between 100% and 138% of the poverty level (enrollees would have been able to qualify for premium reductions if they completed an annual wellness exam and paid required co-payments in a timely manner). In addition, Healthy PA had three different plan designs depending on health status and eligibility, as opposed to a single Medicaid system for all enrollees.

In June 2014, the Corbett Administration had received a strong response from insurance carriers interested in participating in his Healthy PA program: For some regions of the state, as many as six insurers had placed bids, while the Administration had been hoping for at least two per region.  In all, nine insurers were approved by the state to participate in the Healthy PA program that was approved by HHS in late August 2014.

Through these private insurers, newly-eligible Healthy Pennsylvania enrollees were covered under a private, managed care Medicaid program — very similar to what Pennsylvania and many other states already used for existing Medicaid coverage. Although by early October, there were some indications that the carriers providing managed care Medicaid coverage in Pennsylvania were having difficulty getting enough providers to participate in their networks because of the relatively low reimbursement rates compared with commercial plans.

But the complicated waiver-sanctioned Medicaid expansion program in Pennsylvania was short-lived, and the process of dismantling it began almost as soon as Healthy PA coverage started to become effective. When Governor Wolf took office in 2015, he began the process of switching the state to the much less complicated Medicaid expansion program outlined in the ACA — no waivers required.

Transition to HealthChoices

Governor Wolf wasted no time in starting the process of switching to a more simplified version of Medicaid expansion. By April 2015, the transition had begun, and the first round of enrollees had their coverage switched to HealthChoices as of June 1 (HealthyChoices is the name of Pennsylvania’s Medicaid managed care program). This included everyone who was already covered by Pennsylvania Medicaid prior to January, as well as new applicants who enrolled after the end of April. The remaining enrollees switched to HealthChoices on September 1, 2015.

In the transition to HealthChoices, people who enrolled in a managed care plan through Healthy Pennsylvania’s Private Coverage Option were given a choice of managed care providers in the HealthChoices program. But while Healthy PA had three different plan designs, HealthChoices provides all enrollees with the same benefits in an effort to reduce confusion in the state’s Medicaid system.

The state created a 60-second video clip explaining the transition from Healthy PA to HealthChoices.

New eligibility guidelines took effect in 2015

Since January 1, 2015, all legally present adults under age 65 in the Commonwealth of Pennsylvania – parents or not – are eligible for Medicaid with household incomes up to 138% of poverty, as long as they meet Medicaid’s immigration requirements. Children are still eligible for Medicaid or CHIP if their household income doesn’t exceed 319% of the poverty level.

Closing the coverage gap in Pennsylvania

For adults, the change in eligibility rules was particularly beneficial for those with household incomes below 100% of poverty. In 2014, approximately 281,000 Pennsylvania residents – roughly a quarter of the state’s uninsured adult population – were in the coverage gap and had no realistic access to health insurance. That changed in 2015 when Medicaid became available for them.

The coverage gap exists because the ACA’s premium tax credits are only available for households with incomes of at least 100% of the poverty level. The expectation was that everyone below that level would have Medicaid.

But in states where Medicaid has not been expanded, people with incomes below the poverty level simply receive no assistance at all with their health coverage. They are not eligible for Medicaid, and they’re also not eligible for premium subsidies. Their only option is to purchase full-price health insurance, which isn’t practical for most people living on incomes below the poverty level.

Who is eligible for Medicaid in Pennsylvania?

The federal government has categories for mandatory and optional Medicaid and each state sets specific eligibility criteria. The following criteria apply for Medicaid in Pennsylvania (these limits all include a built-in 5% income disregard that’s added to the official eligibility limits):

• • Children aged 0-1: 220% of the federal poverty level (FPL)
  • Children aged 1-5: 162% of FPL
  • Children age 6-18: 138% of FPL
  • Pregnant people: 220% of FPL (postpartum coverage continues for a year after the birth; this used to be 60 days, but was extended to one year as of April 2022)
  • Adults via Medicaid expansion: 138% of FPL

How do I enroll in Medicaid in Pennsylvania?

Medicaid is called Medical Assistance in Pennsylvania. You can apply online, by phone, or by mail, fax, or in person.

• Online: Visit the COMPASS website
• Phone: Call the Consumer Service Center for Health Care Coverage at 1-866-550-4355.
• Mail/Fax/In Person: Download an application and submit it to your local county assistance office (CAO) by mail or fax, or drop it off in person.

Pennsylvania Medicaid enrollment numbers

More than a million individuals had enrolled in Pennsylvania’s expanded Medicaid as of mid-2021. Pennsylvania’s total Medicaid enrollment stood at 3,554,516 people as of May 2022.

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Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.