Governor’s Race 2018: Adding up Wagner’s $1 billion education plan

Sept. 29--Scott Wagner's education plan appears to be as much of a targeted cut to social services as it is a targeted spend on public schools, according to math from his campaign and the state.

The GOP candidate's plan, rolled out last month, is featured heavily in the ongoing tit-for-tat between Wagner and his Democratic opponent, Gov. Tom Wolf. If enacted, the plan could have a much larger impact on health and human services than it would on education.

Wagner pledges to funnel an additional $1 billion in recurring funding to state education without raising taxes, a method that would also involve cutting $600 million via "welfare reform," according to his campaign.

"The $600 million Scott is referencing in regards to welfare reform includes legislation as well as other cost-saving measures," Wagner spokesman Andrew Romeo said in an email last week.

Wagner "will task DHS with implementing any and all cost-saving measures, such as how we run our Managed Care, to ensure that those programs are not only running properly to serve those that need them but that they are not wasting taxpayer money," Romeo said.

"Scott will change the Medicaid program by applying for a Section 1115 Waiver from the federal government, which would allow us more flexibility to ensure quality care is being provided to more individuals," Romeo said. "He supports the Medicaid work requirement proposal the House passed in April."

The hinge of this plan depends on what Wagner's team defines as "welfare."

By the federal definition of the term, Pennsylvania spends $492 million annually on programs that are covered under the federal government's Temporary Assistance to Needy Families block grant. This system was created in 1996, when the federal government began issuing lump sums to states instead of paying for welfare on a per-claim basis.

In the 2016-17 fiscal year, Pennsylvania spent about $1.2 billion on TANF-eligible programs, according to DHS. But $716 million of this funding came from the federal government, and $492 million came from the state.

Most of this funding goes toward Head Start and child care subsidies for working families. About $6 million in state funding goes toward cash TANF payments, the proverbial welfare check.

This would mean that, to achieve a $600 billion savings to be put toward education, Wagner would need to cut deeply into Medicaid.

Managed Care refers to health provider networks run by private insurers to treat Medicare- and Medicaid-funded patients. But one of the biggest chunks of Pennsylvania's managed care program hasn't been phased in yet: The state's Community Health Choices program for dual eligible Medicaid and Medicare enrollees won't hit most of the state until 2019, making it unlikely that cost savings will be identified in time for Wagner to shift dollars to education.

Wagner has been a supporter of state House Bill 2138, which would require the state to seek a waiver from the federal government to modify its Medicaid guidelines to include work requirements.

Those under age 19 and over age 65, as well as those with disabilities and those who are the primary caregiver to a disabled person or a child under 6, would be exempt. Anyone else would have to work at least 20 hours per week, or complete certain monthly job training requirements, to receive medical coverage.

However, it would be extremely difficult to use this requirement to pare down Pennsylvania's Medicaid rolls by anywhere near $600 million.

Pennsylvania pays for 48 percent of Medicaid costs for standard enrollees, and 6.5 percent for enrollees added under the Affordable Care Act expansion, according to the state Department of Human Services. The Kaiser Family Foundation pegs the state's aggregate share at 39.8 percent.

This means the state would save about $2,660 per year for every person subject to work requirements who did not meet them and was subsequently kicked off Medicaid.

To hit the $600 million mark, the state would have to cut 225,564 people off the Medicaid rolls, out of a pool of 438,000 people identified by DHS who would be subject to work requirements. More than half of the working-age Medicaid population would have to fail to prove their work status.

Arkansas, which implemented Medicaid work requirements that mirror those proposed in HB 2138, recently released data showing that about 27 percent of those enrollees subject to work requirements were at risk of not meeting them.

The remaining 73 percent were already working full-time, were medically unable to work, or had a dependent child that prevented them from working enough hours.

Additionally, state estimates on HB 2138 note that removing enrollees from Medicaid as part of work requirements would also incur mandates from the federal government to provide employment training, child care assistance and transportation.

Such costs could total up to $12,000 per enrollee, according to the House Appropriations Committee's fiscal note, although it is impossible to estimate how many people would claim these benefits.

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