Pennsylvania Governor Tom Corbett’s “Healthy PA Private Coverage Option,” aka Medicaid expansion, has been given the seal of approval by federal regulators at the Centers for Medicare and Medicaid Services (CMS).

Pennsylvania becomes the 28^th state including the District of Columbia to expand Medicaid.

Under Obamacare, the expansion in PA will make all adults between the ages of 19 and 64 with incomes through 133% of poverty level eligible for coverage. This includes healthy, able-bodied and childless individuals, as well as those with serious medical needs. Josh Archambault at Forbes reports:

Healthy PA prioritizes able-bodied adults over the truly needy by paying higher reimbursement rates to doctors that treat Healthy PA enrollees through ObamaCare exchange plans. The most vulnerable citizens, on the other hand, remain in a largely broken Medicaid system with lower reimbursement rates, making it even more difficult to access a medical provider as they compete for access with this new expansion population.

Corbett may find out adding the words “private” and “option” won’t make the government entitlement program any more sustainable than the current Medicaid system. Arkansas learned the hard way when it implemented the “Private Option” model. The Medicaid Director and key architect of the state’s expansion program had to abruptly resign in May due to cost overruns, and the Washington Times called Arkansas’s experiment “a national nightmare.”

CMS Administrator Marilyn Tavenner likes to use the words “flexible” and “innovative” when lauding private option plans, but already Governor Corbett has had to back down on one major selling point of his plan. Corbett initially imposed a requirement that those applying for Medicaid coverage show proof they were actively seeking employment. CMS rejected the work incentive, adding that the state would create a separate program to link people receiving healthcare benefits through the Medicaid system to job training and placement services for those who choose to participate.

In addition to pouring more state funds into a voluntary job training program, the Congressional Budget Office has predicted expanding Medicaid through Obamacare exchanges with private insurers will be much more costly than through traditional Medicaid.  

Moreover, in another swipe at free market competition, Corbett’s Healthy PA reduces the number of available benefit plans from 14 to two—high-risk and low-risk. With Medicaid expansion, funds that could be used to get patients with chronic illnesses and disabilities off of waiting lists and better access to services will be used to enroll an estimated 600,000 more people—many of whom are able-bodied.

Will Pennsylvania follow Arkansas down the road to fiscal ruin starting January 1, 2015 despite the cosmetic name-change? And how can a GOP Governor who is supposed to support limited government and genuine free-market competition expand a welfare program already rife with fraud and waste?