Pennsylvania Balks at Medicaid Expansion, For Now

Published March 21, 2013

For the time being, Pennsylvania Gov. Tom Corbett is not planning on expanding Medicaid under President Obama’s health care law, citing cost concerns, distrust of federal promises, and the desire to retain state autonomy. But that could change as negotiations with the Obama administration continue.

In a February 5 letter to federal Health and Human Services director Kathleen Sebelius, Corbett wrote, “Washington needs to stop treating Medicaid as a one-size-fits-all mandate and start granting states true flexibility to successfully reform and build a system that works for them.”

But Nate Benefield, director of policy analysis for the Commonwealth Foundation, said Corbett has not indicated clearly what he wants.

“He’s kind of said we can’t afford expansion at this time, and has decided the Medicaid cost increases even without the expansion are unsustainable for the state,” Benefield said. “He has indicated that we want flexibility, but hasn’t really put forward a plan for what the state would do if the federal government allowed it.”

Corbett’s Position Unclear

President Obama’s law initially forced states to expand eligibility for Medicaid up to 138 percent of the federal poverty line (FPL). But the U.S. Supreme Court ruled the federal government could not force states to increase Medicaid eligibility.

According to the Commonwealth Foundation, expansion would extend Medicaid eligibility by  800,000 in Pennsylvania, placing a quarter of state residents on government insurance (40 percent including Medicare enrollees). Benefield says the foundation also found newly eligible Pennsylvania Medicaid recipients would cost taxpayers more than $21 billion from 2014 to 2022, with the state portion between $1.3 and $5.5 billion.

“Our position would be that he should try to do without expanding at all, and reject expansion entirely, but still push for flexibility,” Benefield said. But “if Governor Corbett decided to change his mind and push [for Medicaid expansion], I don’t know if there’s legislative support in Pennsylvania to expand Medicaid, especially in the House of Representatives.”

“It’s unsustainable even without expanding,” concluded Benefield, “and expanding just requires us to spend money we don’t have. Long-term, the state can’t afford to do it. I don’t think there’s any doubt about that.”

Legislators Pressure Corbett

Rep. Gordon Denlinger (R-Narvon) said he’s hopeful Corbett won’t expand Medicaid.

“The governor has come at this from two basic standpoints. First, that the HHS and Secretary Sebelius have provided inadequate guidance to the states and to Pennsylvania specifically in terms of how this would all operate and what Pennsylvania’s true obligations, and the costs, by extension, would be,” Denlinger said. “Secondarily, he is saying that from a budgetary standpoint the state cannot afford it,… that there is really no confidence level that the federal government would be there in the out years and this is going to land more on Pennsylvania state taxpayers.”

Denlinger and Rep Tim Krieger (R-Delmont) are part of a group of legislators who have drafted a series of joint letters to Corbett about Medicaid expansion.

“The group in the legislature believe very strongly that expansion is a very bad thing for the state,” Krieger said.

‘Absolutely Unsustainable’

Denlinger said Corbett has indicated a desire to collect more information from the federal government.

“That’s a little bit concerning, because it’s not a rock-solid, airtight ‘Absolutely not,’ but we do understand that the governor wants to make informed decisions, and we’ll respect his need to do so,” Denlinger said. “Medicaid is another entitlement program, and it is founded on federal dollars that do not exist. It would all be borrowed money, in the final analysis, and this is coming from a government that’s over $16 trillion in debt and getting further in every day, every hour.”

“To this point, we applaud the direction he’s taken,” said Denlinger, emphasizing concerns for both personal liberty and fiscal prudence. “We want to continue to communicate to him that there are many conservatives in the Pennsylvania State House and State Senate who will stand with him and stand against this encroachment of federal authority and the assault on state budgets.”

“I think it’s absolutely unsustainable,” said Krieger, “and it’s better not to be part of it any more than we already are.”