Pennsylvania Needs to Expand Medicaid - Now

No one would deliberately design a health care system that leaves hundreds of thousands of low-income working families out in the cold, but that is exactly what will happen if Pennsylvania fails to expand Medicaid health coverage next year under the Affordable Care Act.

We are talking about hairdressers, mechanics, retail employees, waiters and waitresses, and others working in jobs that do not offer insurance. Their jobs pay too much to qualify for Medicaid now but not enough to get financial help buying insurance coverage through the new federal Health Insurance Marketplace. In other words, these Pennsylvanians are about to fall into the “Pennsylvania Gap.”

Governor Tom Corbett can prevent this by supporting the expansion to proceed in 2014 as the ACA envisioned. Instead, he has chosen a slower and much less secure path, proposing his own complex, 11th hour plan that will require federal approval to move forward and has no chance of getting done by Jan. 1.

Governor Corbett’s plan would take the same amount of Medicaid dollars available to the state to expand Medicaid, but use it to buy insurance through private companies. Federal approval of his plan is far from certain and would not likely happen until late 2014 or 2015. The governor’s plan would also reduce the type of health care people can receive under Medicaid and add work requirements for receiving coverage, which may not be permitted under federal law.

To better understand what’s at stake with the governor’s plan, let’s step back and ask what exactly is Medicaid?

Medicaid is a joint state and federal program providing health care coverage to seniors, people with disabilities, low-income children, pregnant women and parents with very low incomes. Uninsured adults without children are rarely eligible.  

The governor has repeatedly claimed that Medicaid is bloated and too expensive, therefore cuts to the health services it covers are necessary. Unfortunately this argument perpetuates false assumptions and inaccurate stereotypes.

Medicaid is especially vital to two important groups of Pennsylvanians: seniors and children. Today, 35 percent of all children in the state, about 900,000 kids, have access to a doctor thanks to Medicaid. For families with very sick infants, the program is critical to ensuring they get the care they need during their children’s first days and months of life.

What about the cost of Medicaid? Well, rising costs are driven largely by the state’s aging population. Pennsylvania has the fourth largest percentage of seniors in the country, behind only Florida, West Virginia, and Maine. That’s a lot of seniors, and the majority of those who eventually need long-term care depend on Medicaid.

It’s easy to see why. A year in a nursing home can cost $80,000 to $100,000. Since most middle class families quickly go through their life savings at these rates, Medicaid is the backbone of nursing home care in the state.

Our growing and graying senior population needs our support. Pennsylvania already spends about 62 percent more on their care than the national average.

The combined cost of caring for seniors and people with significant disabilities is nearly 75 cents of every Medicaid dollar spent. Add children and it is 80 cents on the dollar. Given that many vulnerable people depend on the program, the governor’s threat to cut the health care services they currently receive with Medicaid will have harmful consequences to those individuals and families.

All of those demands on the program have made Medicaid extremely efficient. A staggering 96 percent of Medicaid dollars goes to health care providers – not overhead, corporate profits, executive bonuses or multi-million dollar ad campaigns common with private insurance companies.

Governor Corbett’s plan is risky given what is at stake for Pennsylvania. The state could end up leaving federal dollars on the table and miss out on new jobs.

The best choice for Pennsylvania is clear. Rather than pursue a plan that will delay medical care for 400,000 uninsured people and potentially reduce access to a doctor for millions of others, Pennsylvania should immediately join every one of its neighboring states by using federal funds to expand Medicaid in 2014.


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