Corbett administration officials said they submitted a proposal to the U.S. Department of Health and Human Services on Monday to start the final negotiation toward an agreement.
It came after months of discussion between the two sides and heavy in-state pressure on Corbett to embrace a Medicaid expansion from groups including the AARP, labor unions, hospital executives and even the Republican-controlled state Senate.
It also continues the evolution of Corbett, from a conservative who sued unsuccessfully to overturn President Barack Obama's signature health care law and is characterized by critics as heartless toward the poor to someone who now says he wants to securing affordable health care for all Pennsylvanians.
His plan starts by insisting that Pennsylvania get a deal similar to one already being sought by Iowa and Arkansas.
Under that scenario, federal Medicaid expansion dollars would pay the premiums for newly eligible adults to get private insurance in a new health care marketplace instead of being used to expand the traditional Medicaid coverage that typically pays lower reimbursements to doctors and hospitals.
The Corbett administration estimated that 520,000 more Pennsylvanians could get health insurance under broader eligibility guidelines that include adults making up to 133 percent of the federal poverty level, or about $31,000 for a family of four.
In addition, he wants to pare back benefits for able-bodied adults who are already on Medicaid and require the unemployed and able-bodied who are seeking Medicaid coverage to search for work through an online job clearinghouse set up by the Corbett administration.
Pennsylvania cannot afford to expand the existing Medicaid program that already covers one in six people, including children and the elderly in nursing homes, Corbett said in a news conference at Harrisburg Hospital to announce his plan. But he contended that his administration has come up with a better and more affordable answer for Pennsylvania than Washington can.
"If the goal is to give everybody quality and affordable health care, this is Pennsylvania's way of doing that," Corbett said.
He also dismissed questions about how he would respond if the federal government rejected any of his demands or why a work-search requirement was necessary, and maintained that his plan was a reasonable way to reach out to the uninsured and help them find ways to get health insurance.
Corbett said the proposal would not require legislative approval.
Perhaps predictably, Corbett faced criticism from conservatives who favor limited government and potential Democratic rivals in next year's election. But Senate Majority Leader Dominic Pileggi, R-Delaware, released a statement of support. And Senate Democrats issued a statement that, rather than criticize, reiterated that they favor an expansion of the existing Medicaid program and urged Corbett to move quickly to ensure an expansion is in place Jan. 1.
The federal Medicaid expansion dollars become available Jan. 1. But it is not yet clear not only whether the Obama administration will agree to Corbett's conditions, but how long it will take to come to an agreement.
On Monday, a Health and Human Services spokesman would only say that agency officials are "encouraged by Pennsylvania's commitment to helping cover more of the state's uninsured population" and that it is eager to work to provide the best options for Pennsylvanians.
In addition, Corbett's public welfare secretary, Beverly Mackereth, has said that the administration will probably need until 2015 to negotiate and prepare for a Medicaid expansion plan, even if Pennsylvania agrees to accept the dollars.
In recent days, Corbett administration officials have expressed optimism that the federal government will agree to many of the demands, though they acknowledge that Health and Human Services officials have discouraged a work-search requirement.