Medicaid expansion: What to expect

by Janet Golden, PhD

Published Sep. 2, 2014, 9:11 a.m. ET

On Thursday, August 28th we got the news that the Federal Government's Centers for Medicare and Medicaid Services (CMS) approved, with some changes, the Healthy Pennsylvania plan for Medicaid expansion. The official statement is here. And the official letter is here. Thanks to the Affordable Care Act, funding for Medicaid expansion is paid for by the federal government until 2016. After that, the state is to pick up 10 percent of the costs. About 300,000 low-income Pennsylvania residents will be eligible for the new coverage, with enrollment beginning in January 2015.

While the expansion of Medicaid is new, the program is almost fifty years old. Medicaid along with Medicare (a social insurance program for those over 65, certain younger people with disabilities and those with End Stage Renal Disease) became the law of the land in 1965 as part of President Lyndon Johnson's Great Society Program. Medicaid serves people of low income who cannot afford health services or insurance on their own and is managed by the states. Details of the program's development over the past 49 years can be found here.

Whether or not you receive Medicaid coverage now or will do so under the expanded program, as a Pennsylvania resident you are likely to benefit. A detailed study undertaken by the Kaiser Family Foundation and published in November 2013 reported that Medicaid was likely to "generate increased state economic activity such as increases in state out, Gross State Product (GSP) and state and local revenues." In addition, the report suggest additional positive effects on both jobs and earnings. Read the entire report here. Meanwhile, states that have yet to expand Medicaid coverage are foregoing billions in federal funds and lessening economic and job growth, while their hospitals lose billions of dollars, according to a recent study from the Urban Institute. Thankfully, we are no longer on that list!

Fights over benefits to be covered under Pennsylvania's Medicaid Plan still loom. Formal assessments of the impact of expanded coverage are years away. But if the past is prologue, then Pennsylvania's expanded Medicaid should begin yielding health and economic benefits after it begins at the start of next year. We'll be watching and reporting on both the rollout and the impact of expanded coverage.