Policy Documents

Should Pennsylvania Expand Medicaid?

Michael Cannon –
June 20, 2013

In June 2012, the Supreme Court made the Patient Protection and Affordable Care Act's expansion of Medicaid optional for states. In my testimony, I will explain why it would be harmful to Pennsylvania and the nation were state officials to implement the expansion.

Key that I will make in my testimony include:

• Expanding Medicaid would require Pennsylvania to increase taxes and/or reduce spending on education and other services by far more than initial projections suggest.

• Refusing to expand Medicaid would reduce federal deficits and the federal debt, which are an implicit tax on future Pennsylvania taxpayers. A recent study estimated the states that have most forcefully rejected the expansion will reduce federal deficits by and debt by more than $8 billion per year.

• The vast majority (84 percent) of those who would receive Medicaid coverage under the expansion already have private insurance today. Expansion could reduce their access to care and increase emergency-room use, with potential negative health consequences.

• Medicaid may not even improve these enrollees' health at all. A study of the most vulnerable people targeted by the expansion found "Medicaid coverage generated no significant improvements in measured physical health outcomes."

• Expansion would reduce jobs, not increase them.

• Expanding Medicaid means forcing Pennsylvania taxpayers to give even more of their income to Medicaid fraudsters.

• The federal government has announced a plan to rescind the Medicaid "DSH" cuts that were leading many hospitals to argue for the expansion.

• Expanding Medicaid would not eliminate discrimination against citizens nor eliminate penalties against employers. Alternative strategies are available that would completely eliminate both.

• The expansion will be permanent. Automatic "sunset'' provisions would be easily overridden. Some legal scholars warn the federal government could prevent states from leaving the expansion.

• Covering the expansion populations through the state's health insurance "exchange," as Arkansas has proposed, would increase the expansion's cost to both to the state and the federal government by 50 percent, and is likely unlawful.

• Under NFIB v. Sebelius, Pennsylvania can refuse to implement all mandatory Medicaid provisions in the PPACA-including eligibility for all children below 138 percent of poverty, "maintenance of effort," the "MAGI" income standard, and eligibility determinations for Exchanges-not just the newly eligible adult population.

• A Tennessee-style "good Samaritan" law and medical malpractice liability reform would expand health care to the poor without costing Pennsylvania taxpayers anything.

• Pennsylvania would have plenty of company if it chose not to participate. Twenty or more states are refusing to implement the Medicaid expansion.

Rather than burden taxpayers with this new expense, Pennsylvania should refuse to implement either the Medicaid expansion or a health insurance Exchange; join Maine in challenging HHS's attempt to force states to implement parts of the expansion the Supreme Court rendered optional; join Oklahoma in challenging the IRS's attempt to issue subsidies and impose taxes that Congress did not authorize; launch an Oregon-like study to measure Medicaid's impact on existing populations; and enact "Good Samaritan" laws and medical malpractice liability reforms that expand access to care for the poor without imposing new burdens on taxpayers.