How Medicaid expansion could solve Pennsylvania’s budget crisis

State lawmakers have less than two weeks to close a projected $1.2 billion budget shortfall. As the Inquirer recently reported, tax collections in the current fiscal year are $600 million behind projections. That leaves lawmakers with a choice that no elected official wants to make in an election year: raise taxes, or further cut into vital services that have already taken substantial hits in previous years.

But there’s another choice. A simple, obvious, straightforward solution – one that’s not only fiscally responsible, but also supported by sixty percent of Pennsylvania voters: Medicaid Expansion; specifically, a temporary expansion of health coverage as a bridge until a decision on the Governor’s “Healthy PA” plan is made.

Lawmakers in New Hampshire recently pursued this option, in response to a persistent public outcry over the legislature blocking access to health care for low-income residents, and the fiscal realities facing their state. Recently, the Republican-controlled Senate came together with the Democratic-controlled House to enact a Medicaid pilot project, expanding coverage and drawing down federal funds while they await a decision on their state’s private option waiver request.

Like Pennsylvania, New Hampshire preferred an expansion of coverage that utilized private carriers, rather than traditional Medicaid, and submitted a waiver request to the federal government to move forward with a modified expansion. However, New Hampshire lawmakers realized that blocking access to coverage and rejecting federal funding in the interim – funding that could be working to create jobs, protect the fiscal health of rural and community hospitals and save taxpayer money – was damaging to the state’s economy and health of its low-income families.

We could absolutely do that here in Pennsylvania, and we absolutely need to do that, right away.

Since January 1st, Pennsylvania has blocked $4.8 million dollars in federal funding to expand coverage from coming into our state’s economy. That’s money that could be strengthening rural and community hospitals, creating jobs, and stimulating billions in new economic activity across the Commonwealth.

Accepting federal funding now to expand health care coverage as a temporary bridge to Healthy PA would secure $600 million for Pennsylvania’s 2014 – 2015 budget, a combination of savings and new revenue affirmed by three separate economic analyses, including one by Pennsylvania's Independent Fiscal Office.

Saying yes to a temporary “bridge” expansion would ensure that negotiations over Healthy PA continue, without leaving hundreds of millions of dollars in federal funding on the table that could help Pennsylvania’s economy right now. We’ve got a coverage gap, and a budget gap, and we can begin to close them both by expanding Medicaid.

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