Wolf Administration Cabinet Officials Tell Pennsylvania Congressional Delegation the Proposed American Health Care Act Will Have Dire Consequences for 1.1M Pennsylvanians

Washington, D.C. – Today, Human Services Secretary Ted Dallas and Insurance Commissioner Teresa Miller delivered a strong message on behalf of Governor Wolf to members of Pennsylvania’s Congressional delegation about the negative impact of the House Republicans’ American Health Care Act (AHCA) on more than one million Pennsylvanians whose health care coverage will be significantly affected by the proposed legislation.

“Without a significant federal investment, hundreds of thousands of Pennsylvanians will lose health care coverage. The state would have to find $2.2 billion to cover the costs of just those in the Medicaid expansion category, a cost we simply cannot absorb without devastating cuts to other critical program,” said Governor Wolf. “The majority of the people who will be affected are working people who do not have access to affordable coverage through their employer.”

Secretary Dallas and Commissioner Miller met with several members of Pennsylvania’s Congressional delegation in Washington, D.C., today, to deliver the message in person of how devastating the effects of the AHCA would be on so many Pennsylvanians.

“We will be forced to make decisions about whom we can afford to cover, what services we will be able to continue to cover and what rates we will be able to pay providers,” said Department of Human Services Secretary Ted Dallas. “With one in four Pennsylvanians over the age of 60 in the next few years, we will find it difficult to provide the same level of care to seniors and vulnerable persons – like those with disabilities.”

Further, this plan defunds Planned Parenthood, a valuable family planning provider in the commonwealth. When Texas eliminated Planned Parenthood from its family planning program, researchers found a 27 percent increase in births to women previously on an injectable contraception, and pregnancy-related deaths doubled.

“Not funding Planned Parenthood will have a dramatic impact on Pennsylvania’s Medicaid program,” said Wolf. “Unintended pregnancies will increase and reproductive health services will need to be covered. These have real costs attached to them that the state will have to bear.”

Another component of the plan includes the health insurance exchange. The nearly $1 billion in tax credits Pennsylvanians used to help pay for health insurance from the federal exchange would be lost and replaced with tax credits that are based on age instead of the current subsidies that are based on need.

Generally, people who are older, lower-income, or live in high-premium areas like rural Pennsylvania receive larger tax credits under the ACA than they would under the American Health Care Act replacement. Under the proposed AHCA, people who are older will receive the largest tax credits, but the proposal also allows older Pennsylvanians to be charged up to five times more than younger individuals. The $4,000 provided through tax credits will likely not be enough to offset this proposed age tax.

“At the crux of all of this is the fact that older Pennsylvanians, people with disabilities, and low-income people will be most negatively impacted,” said Pennsylvania Insurance Commissioner Teresa Miller. “For example, a 60-year-old in York County making $30,000 annually would see a $10,280 reduction in the tax credits they receive in 2020 with the new American Health Care Act. That amount of money could mean the difference between getting health care coverage or paying rent.”

The AHCA would create plans with slimmer benefits and larger out of pocket costs like deductibles, copays, and coinsurance. This would shift the majority of costs to consumers when they try to access care, which would disproportionately impact people who have significant health needs and low- and middle-income individuals who would not be able to afford significant health bills – something fewer Pennsylvanians struggle with due to the ACA.

As a result of the Affordable Care Act (ACA), more than 1,100,000 Pennsylvanians have gained coverage – over 715,000 through Medicaid expansion and about 410,000 through the Marketplace. The commonwealth’s uninsured rate also fell from 10.2 percent to 6.4 percent (4.1 percent for Pennsylvania children) in four years, the lowest it’s ever been.

The ACA gave states the option to expand Medicaid eligibility to individuals 19 to 64 years of age up to 138 percent of the federal poverty level, and in 2015, Governor Wolf expanded Medicaid eligibility for these individuals in the commonwealth. The newly proposed plan modifies Medicaid expansion eligibility and the enhanced federal match associated with the coverage of individuals under the expanded eligibility level.

Prior to expansion, Pennsylvania provided coverage to 140,000 people through the General Assistance medical assistance program. While that program was suspended in favor of more comprehensive coverage offered by Medicaid, it is still a statutory requirement that the state provide this coverage. Without federal dollars to cover the expansion population, the commonwealth would still be legally required to provide coverage at a cost of approximately $645M in state funds.

The new legislation proposes a per capita cap rate for each of the following five eligibility groups effective federal fiscal year 2020:

  • Elderly
  • Blind or disabled individuals
  • Children
  • Low-income adults
  • Expansion adults

Unlike current funding, which provides federal matching funds for Medicaid expenditures made on behalf of all of the state’s federally approved Medicaid eligibility groups, this proposal would limit federal funding to the capped amount calculated and would provide no additional federal funding for health care costs that exceed the calculated cap.

Pennsylvania continues to evaluate what additional amounts will be included in the per capita calculation. For instance, supplemental payments made to providers, such as hospitals, nursing facilities, and safety net providers may or may not be included within the calculation. These funds provide additional support for Pennsylvania providers.

In Pennsylvania, Medicaid and CHIP combined provide coverage to over 2.8 million Pennsylvanians, almost half of them children. Medicaid plays a key role in the U.S. health care system, accounting for one in six dollars spent overall in the health care system; more than one in three dollars provided to safety-net hospitals and health centers; and one in two dollars spent on long-term care.

In addition to those benefits, the expansion has had significant additional positive impacts on Pennsylvania, including:

  • 124,000 individuals with a substance abuse disorder were able to gain access to drug and alcohol services.
  • General acute care hospitals saw a $92M decrease in uncompensated care in year one. This was the first time the amount of uncompensated care decreased since 2001.
  • 4,422 more physicians, 601 more dentists, and 444 more certified registered nurse practitioners enrolled in the Medical Assistance program.
  • $1.8B in payments to health care providers and the addition of 15,500 jobs in Pennsylvania in year one.

“The public supports the ACA,” said Wolf. “In fact, in recent polling it’s experiencing its highest ratings of favorability. The ACA is providing lifesaving access to health care to more than a million Pennsylvanians. It needs to be repaired – not replaced.”

For more information, visit www.pa.gov.