PA's Medicaid program costs under concern

Pennsylvania will need to spend $2 billion over the next five years to cover its expanded Medicaid program.

And while lawmakers are worried about finding the money to foot the bill, the Pennsylvania Department of Human Services insists that doing so will lower costs in the long run.

Senate Republicans are not yet convinced and hope the new Trump administration will agree to reevaluate the state's waiver, approved just weeks before President Joe Biden stepped aside, amid the governor's request for a $1.9 billion single-year increase in the Department of Human Services budget.

That same plan forecasts a $330 million growth in expenses for the department through the end of the decade – a figure that's been cast into doubt given its historical $1 billion budget expansion year after year.

Senate Appropriations Chairman Scott Martin, R-Strasburg, said the cost of the bigger Medicaid program alone will average $400 million annually, often providing more support than private health insurance does.

But the worries don't stop there, he added. This strain means the state can't afford to increase the Medicaid reimbursement rate, leaving many providers unwilling to accept the program.

"I think it's important, as we balance out what's in the program and adjusting with demographics, do people have any skin in the game at all, especially those that are able to?" he said during a budget hearing with the department on Wednesday.

Martin tried once before to set work requirements for Medicaid services. His bill made it to former Gov. Tom Wolf's desk, who then vetoed it over concerns that the additional staff required to enforce the rule would cost too much.

"It will save money for the federal government," Department of Health Secretary Val Arkoosh said. "I don't know, and from what I see here, it won't save money for the commonwealth.

Martin was one of four Senate Republican signatories on a Feb. 21 letter obtained by The Center Square that was sent to federal Health and Human Services Director Robert F. Kennedy Jr. asking for his intervention, arguing that the expansions are "a risk to fiscal stability" and could force service cuts for vulnerable populations.

According to Arkoosh, nearly 3 million people are currently on Medicaid throughout the state and over a third of that number are children. Medicaid is the payer of last resort, meaning that it only covers costs third party insurance won't.

Some of the expanded offerings include grocery delivery and diet-specific meal planning, accessing public health insurance and stocking up on prescriptions. Rent subsidies are another offering for pregnant women, residents living with chronic physical and mental health conditions and inmates transitioning out of incarceration.

The department says taking proactive measures reduces hospitalizations and emergency room visits, for example, keeping costs lower for managed care organizations that receive a lot of state support.

Arkoosh also pointed to data that shows Medicaid recipients diagnosed with diabetes who lose access to healthy food through public assistance incur a $242 monthly increase in health care costs.

Meanwhile, 18% of juveniles re-entering society after incarceration report three or more emergency room visits within the first year, heaping more uncompensated care onto already-strained hospitals.

"I'm never going to sit here and tell you that Medicaid's going to go down, but it will turn into a slower rise," Arkoosh said. "I know that this program is expensive and I know the costs are going up, but truly we are doing everything we can to keep these cost drivers as low as we can."