New budget challenge surfaces for Governor Corbett

Written by The Associated Press | Nov 12, 2013 5:31 PM
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(Harrisburg) -- A drop in the amount of federal Medicaid matching dollars for Pennsylvania's services for the poor and disabled could be the latest significant budget challenge facing Governor Corbett.

Department of Public Welfare Secretary, Beverly Mackereth, wrote today to the director of the U.S. Centers for Medicare and Medicaid Services out of concern that Pennsylvania will lose about $325 million in federal Medicaid funding next year.

In the letter, she asks the federal agency to check on an estimate that Pennsylvania's formula-driven Medicaid matching funds will drop by 1.7 percentage points from the current federal fiscal year to the federal fiscal year that begins Oct. 1, 2015.

Mackereth calls it the biggest single decrease in the commonwealth's federal Medicaid match in decades and warned that cuts to benefits and payments to doctors and hospitals could result.

"If Pennsylvania were to lose over $325 million in federal funding for the Medicaid program, it will be incredibly challenging to continue to operate the current program and we would be forced to consider difficult cost-saving measures, including potential reductions to benefits and provider payments," Mackereth wrote to CMS' director, Cindy Mann.

A spokeswoman for the federal agency did not immediately respond to a request for comment this afternoon. Mackereth's agency receives about $15 billion a year in federal funding for a wide range of safety-net programs and human services, primarily health care for the poor and nursing care for the elderly.

Corbett's budget office estimates the state is facing a $1.4 billion deficit in the state's 2015 fiscal year that begins July 1, driven partly by rising public employee pension costs. An arbitration decision in a fight with tobacco companies also could cost Pennsylvania about $170 million that it was counting on next year.

This story was updated at 7:04 p.m. 11/12/13

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