PA facing potential $325 million in Medicaid cuts next year

As Pennsylvania's policymakers struggle with a decision to expand its Medicaid eligibility under the Affordable Care Act, the Keystone State is facing a potential cut of $325 million in funding next year, the Philadelphia Inquirer reported.

According to the Inquirer, Pennsylvania's matching fund formula is set to drop as much as 1.7 percent next year, triggering the revenue shortfall. Pennsylvania receives about $15 billion a year in federal funding for safety net and other programs.

Beverly Mackereth, the state's public welfare secretary, wrote a letter to Centers for Medicare & Medicaid Services Director Marilyn Tavenner earlier this week expressing concerns about the potential shortfall, which she termed as the largest in decades. She warned that payment cuts to hospitals, doctors and other providers may result in order to make up the shortfall.

The potential shortfall to Medicaid comes as Gov. Tom Corbett, a Repubican, is still deciding whether to expand eligibility for the Medicaid program under the Affordable Care Act. Should Pennsylvania expand Medicaid, about 340,000 more residents in the state would gain coverage and economic activity is projected to increase by about $3 billion a year. Pennsylvania would have to spend about $53 million extra if Medicaid were expanded in 2014, and that sum would rise to $611 million in 2020 as the federal government reduces payments for the expanded coverage,

Corbett has suggested expanding Medicaid coverage by placing newly eligible Pennsylvanians into the state's health insurance exchange with subsidies to buy policies. The state's Legislature has yet to vote on such a proposal.

A recent  American Cancer Society poll concluded that Pennsylavnians support expanding Medicaid by a 40-point margin, Politics PA reported.

"Pennsylvania has an opportunity to provide thousands of currently uninsured people with lifesaving health coverage through Medicaid, and public sentiment is decidedly in favor of using available federal dollars to pay for it," Diane Phillips, state policy director of the American Cancer Society's Cancer Action Network, told Politics PA in a statement.

To Learn More:
- read the Philadelphia Inquirer article
- read the Politics PA article

Related Articles:
PA's Corbett floats proposals for Medicaid expansion
No Medicaid expansion till 2015 for Pennsylvania, top official says
Will Pennsylvania join Medicaid expansion supporters?
PA hospitals bear $1B uncompensated care burden
Pennsylvania hospitals see declining margins

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