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Gov.'s plan viewed

Medicaid proposal leaves questions

HARRISBURG — Numerous questions hung Tuesday over Gov. Tom Corbett’s plan for additional federal Medicaid dollars, a day after he announced the plan and sent an outline to federal officials.

Corbett’s proposal hinges on an idea several other states are exploring. It calls for using new federal Medicaid dollars to buy private insurance policies, instead of expanding government rolls for adults who are newly eligible for coverage under President Barack Obama’s signature 2010 health care law.

But private insurance policies cost much more than the traditional Medicaid program, and it is not clear who would pay the difference or how that gap would be eliminated.

Joan Alker, executive director of the Georgetown Center for Children and Families in Washington, D.C., described the arrangement Tuesday as an experiment. “... And the federal government has indicated that they’re willing to consider a limited number of these experiments,” Alker said.

Medicaid costs less because its reimbursements and administrative costs are lower and it doesn’t build in profits, analysts say. Corbett administration officials hope private-sector competition will force prices down enough to eliminate the gap.

Alan Weil, executive director of the National Academy for State Health Policy in Washington, D.C., said he believes the gap will eventually disappear, partly because consumers will be able to compare insurance policies side-by-side in the new government-run insurance exchanges that, under the 2010 law, open for business Jan. 1.

Comparison shopping will bring down the cost of commercial policies while Medicaid reimbursements must rise if the state-federal program is to expand and be accepted by more medical professionals, Weil said.

“The question is at what speed?” he said.

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