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States must decide whether to expand Medicaid programs
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The nation's governors face a tough decision now that the U.S. Supreme Court, in the course of upholding President Barack Obama's health care overhaul, said federal officials can't threaten to take away existing federal medical assistance funding if states decide not to expand their Medicaid programs.
That leaves it up to the states -- and officials such as Gov. Tom Corbett, who fought the law -- to weigh the costs and benefits of expanding the pool of low-income residents covered by the assistance program.
"The ruling, in effect, makes ... Medicaid expansion optional for states," wrote Matt Salo, executive director of the National Association of Medicaid Directors in Washington, D.C.
On the surface, it looks like an easy choice.
For three years beginning in 2014, the federal government will reimburse states 100 percent of the cost of expanding Medicaid eligibility to 133 percent of federal poverty guidelines, or just over $30,000 for a family of four.
The reimbursement decreases to 95 percent in 2017, and 90 percent in 2020.
With such generous federal funding, "We would expect Pennsylvania will go ahead and take up the expanded Medicaid," said Ann Bacharach, special projects director for the Pennsylvania Health Law Project. She estimates the expansion would make about 800,000 more Pennsylvanians eligible for medical assistance beginning in 2014.
But Mr. Corbett is not rushing to decide.
"We need to take the time to review the decision and see what our options are," said administration spokeswoman Kelli Roberts on Friday.
Some of Mr. Corbett's fellow Republican governors have already said they would oppose expanding their Medicaid programs because it would raise taxes and create much larger bureaucracy -- with no guarantee that the program's cost won't someday fall entirely on the shoulders of the individual states.
The federal government estimates that its Medicaid spending will increase by approximately $100 billion per year, nearly 40 percent above current levels.
Pennsylvania was one of 26 states that legally challenged the Affordable Care Act, with then-Attorney General Tom Corbett leading the way. In a statement Thursday expressing his disappointment with the Supreme Court decision, now-Gov. Corbett promised to "work to ensure Pennsylvanians have access to affordable and quality health care."
But the statement also included a possible hint about the governor's inclination on Medicaid expansion. The Affordable Care Act, he said, "increases national medical spending and expands Medicaid to unsustainable levels."
If the state opts not to expand Medicaid, though, the effects will ripple beyond the 800,000 Pennsylvania adults who may find themselves scrambling for alternate health insurance coverage -- or going without. Children and teens in Pennsylvania who are not eligible for medical assistance may be able to get health insurance through the Children's Health Insurance Program, or CHIP.
Paula Bussard, senior vice president for policy and regulatory services for the Hospital and Healthsystems Association of Pennsylvania, noted that even if the state decides against expanding its Medicaid program, "obviously Pennsylvanians would still be paying federal taxes" to support various other programs connected to the Affordable Care Act.
Hospitals could be hit financially, too.
Currently, hospitals receive additional government funding if they care for a "disproportionate share" of uninsured patients at their facilities. With the passage of the Affordable Care Act, the number of uninsured decreases by some 30 million people and those disproportionate share payments will go down as well.
If the state decides against expanding Medicaid, hospital officials say they could be treating nearly as many uninsured patients without getting paid -- while losing the extra funding to help cover the expense.
"I think it will take a while to fully understand what it means on the medical assistance piece," said Denis Lukes, vice president for payer relations and reimbursement at the Hospital Council of Western Pennsylvania. "I think there's a lot of confusion."
Dorothy Young of Pittsburgh Welfare Rights, for one, simply believes there's a human imperative to expanding Medicaid eligibility in Pennsylvania.
"With them taking away [the low-cost health insurance program] adultBasic and trying to cut general assistance, they're going to have to," she said. "They're going to have to whether they want to or not."
First Published July 1, 2012 12:00 am
