Governor Wolf, Senator Casey Warn PA Could Lose Billions from GOP Repeal Plans

Harrisburg, PA – Governor Tom Wolf and U.S. Senator Bob Casey today warned that Pennsylvania could lose as much as $12.7 billion annually in federal funding by 2030 depending on the implementation of changes to the Affordable Care Act.

The Wolf Administration’s Department of Human Services (DHS) released an analysis that by 2030, Pennsylvania will see a $3.6 billion to $9.2 billion annual loss in federal funds under the House proposal and a $5.5 billion to $12.7 billion annual loss in federal funds under the Senate bill.

“This comprehensive analysis by DHS confirms that the Washington Republicans continue to ignore the concerns of Pennsylvania families and ideas proposed by bipartisan governors,” Governor Wolf said. “The losses in federal funds to protect health care benefits for Pennsylvania’s most vulnerable are unacceptable and insurmountable. The federal government is once again ignoring seniors, people with disabilities and families most in need. By 2030, it is impossible for me to be governor, so I have an obligation to sound the alarm now about what could happen should Washington Republicans continue down this path.”

“This report makes clear that the Senate bill is a massive shakedown of Pennsylvania’s taxpayers,” Senator Casey said. “This kind of devastating funding loss for our state will mean less coverage and higher costs for middle class families in Pennsylvania. In order to fund tax giveaways for big corporations, congressional Republicans are scheming to reach into the pocketbook of Pennsylvania families, who will ultimately pay for the loss in funding to the state. It’s obscene and wrong.”

Medicaid serves 2.8 million Pennsylvanians, or 22 percent of the commonwealth’s population. This includes nearly 250,000 seniors (65+); 565,000 individuals who receive outpatient mental health services; 215,000 individuals with substance use disorder diagnoses – including 124,000 from the Medicaid expansion population; and 1.2 million Pennsylvania children.

The intent of the analysis was to determine the impact of the two proposals on Pennsylvania’s receipt of federal Medicaid funds. Both bills will adversely affect Pennsylvania’s most vulnerable. The proposed funding cuts and caps to Medicaid reimbursement have caused concerns for recipients, including seniors, children, families, and people with disabilities, and are putting states financially at risk.

Last week, the Senate released a revised health care bill that did not make any significant changes with respect to Medicaid from the previous bill. The only noticeable change is a provision that allows a state to exceed the per capita amounts for expenditures related to a public health emergency and the potential for some states to get additional funds for community-based programs. As a result, DHS’ concerns remain the same.

In 2015, Medicaid paid for over 58,000 births in the commonwealth – nearly 40 percent of Pennsylvania’s total births. Medicaid supports over 30,000 individuals with intellectual disabilities and autism so that they may live in their own communities, and more than 55,000 individuals per month rely on Medicaid to pay for their services in a nursing home.

Medicaid provides $143 million to Pennsylvania school districts to deliver support to low-income children with a disability in schools (School-Based Access Program). According to the PA Health Care Cost Containment Council, Pennsylvania’s Medicaid program provides $5 billion in payments to hospitals in the commonwealth. This represents 13 percent of their total revenues.

DHS ran three scenarios in terms of the projected growth in Medicaid spending without any federal changes – high-cost growth, average-cost growth, or low-cost growth. The growth rates were based upon DHS’ actuarial projections. These amounts are compared to what is projected to be received under the two legislative proposals.

Impact of House bill (AHCA)

  • Starting in 2020, the annual loss of federal Medicaid funds will be the following:
    • $1.5 billion if DHS experiences a high-cost growth rate in Medicaid
    • $1.1 billion if DHS experiences an average-cost growth rate in Medicaid
    • $707 million if DHS experiences a low-cost growth rate in Medicaid
  • In 2025, the annual loss of federal Medicaid funds will be the following:
    • $5.4 billion if DHS experiences a high-cost growth rate in Medicaid
    • $4.0 billion if DHS experiences an average-cost growth rate in Medicaid
    • $2.8 billion if DHS experiences a low-cost growth rate in Medicaid
  • In 2030, the annual loss of federal Medicaid funds will be the following:
    • $9.3 billion if DHS experiences a high-cost growth rate in Medicaid
    • $6.3 billion if DHS experiences an average-cost growth rate in Medicaid
    • $3.6 billion if DHS experiences a low-cost growth rate in Medicaid

Impact of Senate Bill

  • Starting in 2020, the annual loss of federal Medicaid funds will be the following:
    • $850 million if DHS experiences a high-cost growth rate in Medicaid
    • $411 million if DHS experiences an average-cost growth rate in Medicaid
    • No impact if DHS experiences a low-cost growth rate in Medicaid
  • In 2025, the annual loss of federal Medicaid funds will be the following:
    • $5.9 billion if DHS experiences a high-cost growth rate in Medicaid
    • $4.5 billion if DHS experiences an average-cost growth rate in Medicaid
    • $2.7 billion if DHS experiences a low-cost growth rate in Medicaid
  • In 2030, the annual loss of federal Medicaid funds will be the following:
    • $12.7 billion if DHS experiences a high-cost growth rate in Medicaid
    • $9.8 billion if DHS experiences an average-cost growth rate in Medicaid
    • $5.5 billion if DHS experience a low-cost growth rate in Medicaid

The House bill has a larger impact earlier because of an immediate reduction in the federal match for the Medicaid expansion population, but in the end, the Senate bill has a more significant impact because of the lower inflation rate used for the per-capita amounts.