State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

IFO: Medicaid expansion would net billions, but unknowns remain

Written by Mary Wilson, Capitol Bureau Chief | Apr 23, 2013 8:46 PM
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A new study finds expanding Medicaid eligibility in Pennsylvania would yield billions of dollars in federal funding and result in hundreds of millions of dollars in additional state tax revenue over the next eight years.

The Independent Fiscal Office report says the expansion would mean big cost-savings for the commonwealth -- due largely to the number of people whose medical coverage would be picked up by the feds.

But baked into the study are several assumptions necessary for completing a fiscal analysis, says IFO director Matthew Knittel.

"From the administration's standpoint, they can't do that, they have to wait and see for a definitive ruling from the feds," he said.

On the heels of his agency's report, Bev Mackereth, acting secretary of the state Department of Public Welfare, urged key lawmakers to be patient as the Corbett administration waited for more clarity from federal officials. Mackereth voiced concern in a letter that "third-party reports" don't have all the facts, and rely on assumptions that put more than $1 billion for the state's Medicaid program in doubt.

The IFO study was requested by the Senate Democrats, who have repeatedly called on the governor to accept the Medicaid expansion to increase health care access and for its potential to bring federal funding and jobs to the state. Gov. Corbett has said he can't allow the expansion at this time because too much about how it will work is still uncharted.

Knittel noted that the IFO report makes an assumption about whether the commonwealth will be allowed to continue to levy a tax under the expansion that would yield millions of dollars in additional state revenue. The analysis assumes the tax will stay in place. If that's wrong, Knittel said "though it is significant," it won't drastically change the bottom line of the report (that an expansion will bring in federal money and result in savings for the state).

Judging from Mackereth's letter, the Corbett administration's concern remains that other significant assumptions may also turn out to be wrong, and add up to one big game changer.

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