Remarkably some have characterized the Medicaid expansion under the federal Affordable Care Act (ACA) as “free” for Pennsylvania because Washington “covers” the initial few years of cost. This, when the money to pay for the expansion still comes from the same pockets, ours, and the commonwealth will end up shouldering most of the costs in the down years anyway.
In his budget address, Governor Corbett said that Pennsylvania would not be expanding Medicaid under the ACA unless Washington enacts some reforms.
The Governor’s letter to Health and Human Services Secretary Kathleen Sebelius sums up the present and future costs: “The Medicaid program in Pennsylvania is on an unsustainable path. The cost of the current program is over 30 percent of the entire Pennsylvania General Fund budget and continues to grow. For fiscal year 2013-2014 the Department of Public
Welfare’s costs are projected to grow by over $400 million in new state-only dollars.”
In total, expansion under the ACA would add over 800,000 new enrollees into the program – resulting in approximately 1 in 4 Pennsylvanians being enrolled in Medicaid. “Our initial estimates show that a Medicaid expansion under the ACA would cost Pennsylvania almost $1 billion of new state taxpayer dollars through fiscal year 2015-2016… ultimately rising to a total cost of over $4.1 billion of new state taxpayer dollars by the end of fiscal year 2020-2021. Without reform, the only way to support these costs would be a large tax increase on Pennsylvania families.”
The Governor's office further notes that spending on Medicaid programs accounts for 75 percent of the Department of Public Welfare’s (DPW) $27.6 billion budget (including state, federal and other funds). DPW’s budget constitutes 39 percent of the state’s annual budget with Medicaid being the number one cost driver at 30 percent of Pennsylvania’s General Fund.
PMA commends the Governor for the decision to not expand Medicaid coverage as it pertains to the ACA.