Pennsylvania Rejects Medicaid Expansion

March 2013Articles Allegheny County Medical Society Bulletin

On February 5 Governor Tom Corbett announced that Pennsylvania would reject the expansion of Medicaid eligibility under the Affordable Care Act. The June 28, 2012, decision of the U.S. Supreme Courtruled that states had the choice whether to participate in the ACA’s Medicaid expansion, under which the federal government would cover all costs of increased coverage for the first three years, reducing the federal subsidy from 100 percent to 90 percent over the next six years. The majority of Republican governors have rejected the expansion, but a handful, including Florida governor Rick Scott, have broken ranks to accept the expansion and associated federal funding, although not without reservations about the unknown future costs and sustainability of Obamacare.

Gov. Corbett’s letter to Health and Human Services Secretary Kathleen Sebelius can be found at http://tinyurl.com/corbettltr. In the letter, he cites the lack of detailed guidance from Washington and the fact that Medicaid represents 30 percent of the entire state budget. He estimates that the Medicaid expansion would cost Pennsylvania $1 billion through fiscal year 2015-2016 and as much as $4.1 billion by the end of fiscal year 2020-2021. He asks HHS to grant states more flexibility to adopt state-specific approaches to Medicaid reform.

The decision will impact Pennsylvania hospitals that had received Federal disproportionate share payments, which will be reduced under the ACA. Uninsured patients who will not qualify for Medicaid will still need to be evaluated and stabilized in Pennsylvania hospitalsunder EMTALA. The governor’s announcement did not foreclose the possibility that Pennsylvania could reverse course and expand Medicaid in the future if the requested reforms and flexibility are offered.