- Associated Press - Thursday, July 24, 2014

HARRISBURG, Pa. (AP) - Gov. Tom Corbett’s administration has changed its stance on another element of his plan to use federal Medicaid expansion dollars to subsidize private health insurance plans, saying Thursday it will keep a health care program for the disabled.

Public Welfare Secretary Beverly Mackereth made the announcement to a Medicaid advisory group meeting after the idea of ending the Medical Assistance for Workers with Disabilities program had come under fire from advocates. They had worried that shifting those clients into private insurance plans would make health care too expensive for their low-income jobs. It would give them the incentive to stop working or to work less so that they would qualify for free health care, advocates had said.

The proposal to end the assistance program was initially a part of the Republican governor’s plan to use federal Medicaid expansion dollars to extend private health insurance coverage to hundreds of thousands of low-income adults.

The change is the Corbett administration’s latest revision while it seeks approval from the federal government for its plan. The 124-page plan was formally submitted in February and closed-door negotiations began in April after a public comment period.

The shift would have saved the state government an estimated $38 million a year for a program that serves about 36,000 people, Department of Public Welfare officials said.

Not all of the 36,000 would have been shifted into private insurance plans, they said. People who earned 133 percent of the federal poverty level or less - about $15,520 a year for a single person - would likely have met the definition of someone who is “medically frail” and been allowed into the traditional Medicaid program.

However, anyone making more than that amount would have lost their Medicaid-subsidized health care. As an alternative, they could have shopped for health insurance through the marketplace set up by the 2010 federal health care, which also allowed tax credits to help pay for the insurance plan.

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