(Reuters) - Federal officials approved Pennsylvania Gov. Tom Corbett's plan to use federal funds to pay for private health insurance coverage for up to 600,000 residents, the governor said on Thursday.
Corbett was one of several Republican governors to reject federal money to expand state Medicaid rolls under President Barack Obama's Affordable Care Act.
But unlike most of his peers, he sought a waiver in February to use those expansion funds to instead subsidize private health insurance for low-income residents.
Medicaid expansion under Obamacare has become a tool for political jockeying, with many Republicans loathe to support it. In Pennsylvania, the dispute is semantic.
Corbett, who is lagging in the polls in his bid for re-election this fall, said his plan, Healthy Pennsylvania, is not expansion under so-called Obamacare.
The governor "has been clear that he would not expand Medicaid because it is an unsustainable entitlement program," a statement from his office said on Thursday.
However, federal officials said the approval made Pennsylvania the 28th state, including the District of Columbia, to expand Medicaid under Obamacare.
Federal health officials are "committed to supporting state flexibility and working with states on innovative solutions that work within the confines of the law to expand Medicaid to low-income individuals," said Centers for Medicare & Medicaid Services Administrator Marilyn Tavenner in a statement.
"Unfortunately, millions of Americans are still without Medicaid coverage because their state has yet to act," she said.
The approved Pennsylvania program will also reduce 14 current Medicaid plans to two benefit packages, one for low-risk residents and another for high risk.
Enrollment begins Dec. 1, with coverage to go into effect Jan. 1.
(Reporting by Hilary Russ in New York; Editing by Diane Craft)