Intertwined within the state budget negotiations is an issue that has been simmering in the Legislature: that of expanding Pennsylvania's Medical Assistance program. This is an option for each state under the new health reform law, the Affordable Care Act.
To date, Pennsylvania Gov. Tom Corbett has taken the stance that Pennsylvania will not expand Medical Assistance. With the state budget deadline of June 30 looming, the question of Medicaid expansion is bubbling to the surface. Senate Democrats, led by Sen. Jay Costa, included expansion of Medicaid in their budget proposal, placing their position directly opposite of Mr. Corbett's.
Currently, the state's Medicaid program provides health-care coverage to approximately 2.2 million low-income Pennsylvanians who earn about half of the poverty level. This equates to approximately $11,777 annually for a family of four. The program also covers pregnant women, the disabled and the elderly.
If Pennsylvania chose to expand Medicaid, the commonwealth would receive significant funding, which in turn leads to more citizens receiving health-care coverage. Under the Affordable Care Act, the federal government will fund 100 percent of the costs of those who are newly eligible for Medicaid for 2014-2016. After 2016, the federal government match declines to 90 percent by 2020 and is expected to stay at that level for subsequent years.
There have been four economic impact studies conducted all reaching the same conclusion -- Pennsylvania would benefit economically from expanding Medicaid. The studies, conducted by RAND Corp., the Pennsylvania Economy League, Pennsylvania's own Independent Fiscal Office and Families USA conclude Pennsylvania would receive an influx of $2 billion minimally in federal funds each year, creating additional economic growth. Three of the studies found that at least 35,000 new jobs would be created. Job growth equates to people investing in the state economy and employees contributing to the state revenue through payroll taxes.
All four studies confirm several hundred thousand Pennsylvanians would receive insurance who are otherwise not covered. For Western Pennsylvania hospitals and the communities they serve, this would be a boost.
Hospitals and health-care systems are typically among the largest employers throughout the region. These hospitals, whether they are part of a system or stand-alone community hospitals, employ hundreds, thousands or tens of thousands of people.
They provide charity care to those who can't afford to pay. The Hospital Council of Western Pennsylvania's most recent Flash Survey shows that Western Pennsylvania hospitals provided more than $243 million in charity care. The Flash Survey also reported the region's hospitals lost more than $100 million from operations over the same period last year. This is an alarming loss that does not include Medicare payment cuts from sequestration.
The hospital council's data shows that Western Pennsylvania hospitals serve a large percentage of Medicare and Medicaid patients. These patients represent more than 50 percent of patients treated on average by the region's hospitals. Western Pennsylvania also has one of the oldest populations in the country. Age is a critical variable: the more severe the illness, the greater the resources required to care for the patient.
If expanding coverage to our most vulnerable citizens and the continued cost burden on hospitals are not reason enough to expand Medicaid in Pennsylvania, then consider the benefit to the region's business community. Employers who provide health insurance to their employees often pay higher premiums to compensate for the financial losses hospitals absorb in treating patients without insurance. If more uninsured people are covered by Medicaid, hospitals will assume less charity care, thus keeping costs lower for commercial insurers, and in turn, down for employers.
Finally, consider the impact on patients: With the expansion of Medicaid, patients would receive care in the right setting at the right time. Those who obtain coverage will not have to delay treatment and turn to hospital emergency rooms -- one of the most costly settings to receive care. And, because these patients are covered, their treatment will be ongoing, rather than at a crisis point requiring more intense medical interventions.
For the sake of patients, the public, businesses and hospitals in Western Pennsylvania we urge the governor and state lawmakers to expand Medicaid as part of next year's state budget.
A. J. Harper is president of the Hospital Council of Western Pennsylvania (email@example.com).