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Transforming Health: What does Gov. Corbett's rejection of Medicaid expansion really mean?

Written by Megan Lello | Feb 21, 2013 4:14 AM

(Undated) -- Governor Corbett brought up a myriad of highly-anticipated topics in his recent budget address: education, public pensions, transportation.

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And then came this: "So, at this time, without serious reforms, it would be financially unsustainable for the taxpayers, and I cannot recommend a dramatic Medicaid expansion."

Many expected the announcement, but no one really knew when it would come.

Jim Hoefler, a political science professor at Dickinson College in Carlisle, Cumberland County, says he's a bit baffled by Corbett's decision. "It strikes me as petulant. That's the best and only word that I can think of. The governor didn't like the Affordable [Health] Care Act, and I think it's more of a principled position than a well-thought out and rational position."

Under the Affordable Care Act, states can decide whether or not to effectively expand Medicaid next year to people with incomes of up to 133 percent of the federal poverty level. That's about $15,000 for an individual and roughly $26,000 for a family of three.

The federal government would cover 100 percent of the costs for about 500,000 newly-eligible Pennsylvanians for the first three years, and then taper down to paying for 90 percent of the bill.

The Corbett administration has said it would cost the state more than $4 billion to expand Medicaid in the next decade, while the Kaiser Family Foundation puts the price tag at $2.8 billion.

Either way, Republican Representative Gordon Denlinger of Lancaster County says the commonwealth couldn't afford the expansion. "We get into tradeoffs, and what we would have to do is less funding for schools, less funding for children's health insurance, and the other programs that are out there, and so I think Medicaid expansion would be very challenging in the sense that it would cause reductions in other budget priorities."

Besides, Denlinger says, people without insurance can still go to any ER and receive care since hospitals are required by law to provide emergency treatment regardless of a patient's ability to pay.

Not so fast, says Dennis Olmstead, chief economist and vice president at the Pennsylvania Medical Society.

Olmstead says many hospitals may have been depending on Medicaid expansion to help make up for coming ACA cuts in payments to facilities that treat a disproportionate share of low-income and uninsured patients. "It's going to impact, you know, hospitals of all shapes and sizes, all locations, urban and rural."

He says now, without the expansion going forward, rural hospitals in particular with large populations of Medicaid patients may struggle to make ends meet.

But that's nothing compared to the group of people who won't be covered without expansion, says Kyle Fisher, staff attorney for the Pennsylvania Health Law Project.

He says there's a pool of individuals, many of them low-wage workers, who won't be poor enough to qualify for Medicaid, but won't qualify for subsidies to purchase insurance through the federal exchange, either. "We're talking, really, about restaurant and casino workers, or hairdressers or landscapers, who are making $10 an hour, $12 an hour."

Still, Fisher says he's hopeful Corbett's carefully-worded announcement doesn't mean expansion is completely out of the question.

But Jim Hoefler, the political scientist at Dickinson College, says don't hold your breath. "The governor has laid the marker down, and I think this is a principled position that doesn't really take account of the facts."

But one fact is certain: A large number of Pennsylvanians are going to be figuring out how to get health care coverage when the ACA mandates all people must have insurance or pay a fine at the beginning of next year.

Learn more about Medicaid and other health-related topics through witf's multimedia initiative, Transforming Health.

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