Expand Medicaid in Pennsylvania: It's necessary to protect the health of Pennsylvania hospitals

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With the constitutional issues surrounding the Affordable Care Act decided by the U.S. Supreme Court in June and with the re-election of President Barack Obama this week, Pennsylvania now faces a critical decision about whether to expand the state's Medicaid program.

The Hospital & Healthsystem Association of Pennsylvania and its member hospitals understand the importance of the Corbett administration carefully considering its options. At the same time, it is important for the public and policy makers to understand the implications of this decision.

Pennsylvania hospitals were early supporters of the ACA as a means toward covering nearly 1.4 million uninsured citizens in the state. Insured individuals are more likely to receive needed care at the right time in the right setting and to have preventive screenings, both of which lower medical costs. Insured individuals with complex and chronic illnesses are more likely to manage their care and avoid an escalation of health problems. Healthy adults are more productive and healthy children are more likely to succeed in school.

For uninsured and underinsured patients, Pennsylvania hospitals absorb nearly $1 billion a year in unreimbursed costs. To help pay for expanded insurance coverage and reduce these extraordinary levels of uncompensated care, Pennsylvania hospitals agreed to more than $7.5 billion in Medicare and Medicaid payment cuts through 2021 to be used for uninsured individuals' health insurance through Medicaid expansion and subsidies to help individuals purchase private insurance. The net impact on hospitals would be that higher rates of insurance coverage would both reduce hospital losses and improve patient care -- a truly win-win scenario.

If Medicaid expansion is implemented by the state under the ACA, hospitals' financial stability will improve and access to care will be preserved for all patients, whether they are covered by Medicaid, Medicare or private insurance.

If the commonwealth does not expand Medicaid, this could imperil Pennsylvania hospitals because the number of insured patients will not increase but the $7.5 billion in shared sacrifice hospitals accepted as part of the ACA will. Not expanding Medicaid would be a lose-lose proposition.

Too many Pennsylvanians in need would still find themselves without critical health insurance coverage, and many Pennsylvania hospitals' survival would be in doubt, due to the combined effect of $7.5 billion in payment reductions and no increase in Medicaid enrollment or payments. With the federal government facing budget deficits and the threat of a 2-percent "sequester" of Medicare hospital payments in January, the prospect of additional hospital payment cuts unrelated to the ACA looms for hospitals nationwide as well.

The bottom line: Patient access depends on healthy hospitals, and without the implementation of ACA, including Medicaid expansion, all patients -- insured or not -- could face the loss of health care services, or even entire hospitals, in their communities.

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Carolyn F. Scanlan is president and CEO of The Hospital & Healthsystem Association of Pennsylvania (haponline.org).


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