By Daniel Kelley
PHILADELPHIA (Reuters) - Governor Tom Corbett is expected to propose early next week that Pennsylvania extend Medicaid benefits to more low-income residents, likely helping them purchase private insurance using Medicaid funds, a Republican state representative said on Friday.
State Representative Gene DiGirolamo, chairman of the House Human Services Committee, Corbett's proposal probably will look similar to plans in Iowa and Arkansas, other states where officials have resisted the outright expansion of the Medicaid program under President Barack Obama's healthcare reform law.
The model these states are considering would allow them to extend health coverage to more of their poor when the law takes full effect on January 1. Such plans require a waiver from the U.S. Department of Health and Human Services.
"The people covered by the expansion are people with no disposable income to buy private insurance," DiGirolamo said. "These people will still be out there, and their only alternative is the ER."
Corbett spokeswoman Lynn Lawson says that the administration has begun meeting with legislators this week to explain the proposal, but provided no details.
Corbett "has been very clear about the need for reform," the governor's office said in a statement. "There are a number of interesting options under review and consideration as he develops a plan that ensures quality and accessibility for all Pennsylvanians. He will have more to say on this issue sometime next week."
Corbett had long opposed the Medicaid expansion. But local organizations, including hospitals, have pressured elected officials not to forfeit the additional federal funds that come with extending the program. Twenty-six states have so far refused to expand Medicaid under "Obamacare."
The Hospital and Health System Association of Pennsylvania estimates that roughly 350,000 low income, non-elderly state residents would be covered by the Medicaid expansion outlined in the new law.
HHS, which has sought to keep an open door to states that initially rejected Medicaid expansion, said it was "eager" to work with Pennsylvania on coverage options.
"HHS is committed to supporting state flexibility, within the confines of the law," the department said in a statement.
Under Obama's 2010 Patient Protection and Affordable Care Act, as many as 9 million Americans are expected to obtain health coverage next year by raising the income threshold for Medicaid eligibility to 138 percent of the federal poverty level in states that accept the expansion.
The federal government will cover the entire cost of new beneficiaries for the first three years, and then lower its participation to 90 percent over the remaining decade.
Uninsured people with higher incomes will be able to shop for subsidized private insurance in new online marketplaces being set up in each state under the law.
(Additional reporting by David Morgan in Washington; Editing by Michele Gershberg and David Gregorio)