Why Refusing Medicaid Expansion Could Kill Pennsylvania’s Hospitals

"NOOOOOOOOOOOOOOO."

"NOOOOOOOOOOOOOOO!!"

As Pennsylvanians gear up for Gov. Corbett’s decision on whether to accept the federal government’s Medicaid expansion (a state-optional portion of the Patient Protection and Affordable Care Act, according to the Supreme Court’s ruling) in Pennsylvania, it would help to understand that without that expansion, Pennsylvania hospitals will likely suffer huge financial costs.

As Ezra Klein['s Wonkblog] notes at the Washington Post, The PPACA will phase out something called Disproportionate Share Payments—which is essentially extra money Medicaid sends to hospitals to make up for “uncompensated care” to low-income individuals and those who arrive in the Emergency Room without health insurance.

The PPACA phases out DSH payments. Because when almost everyone has health insurance, there is no need for it. But if Governor Corbett does not accept the Medicaid expansion, 100 percent paid for by the federal government until later this decade, hospitals will continue seeing health insurance-less residents, give them care, but not receive cash from the federal government to cover that care.

And the amount of money currently received from the federal government is not small.

Of the $11.3 billion the federal government shelled out in Medicaid DSH payments in FY 2011, $561,847,754 went to Pennsylvania. We’ve been receiving about that amount (as in, above the $500 million mark) over the last few years. Uncompensated care makes up for about 5.8 percent of all hospital expenses, and actually totals more than triple what Medicaid currently dishes.

“Add on another $11 billion,” writes Kliff, “and hospitals would find themselves spending 27 percent more covering unpaid bills.”

Texas, a state which has already vowed to block the Medicaid expansion, receives almost $1 billion in DSH payments per year.

Tom Corbett’s administration has not yet come to a decision on the expansion, though he’s vowed to “ensure the negative impact of this law affects the lives of Pennsylvanians as little as possible.” Last week, Pa. Sen. Pat Toomey urged Republican governors to deny the expansion. As Attorney General, Corbett was an early opponent of the health care law.

[As noted by the below commenter, the article linked wasn't written by Ezra Klein as previously stated in this blog. It was written by Sarah Kliff on Ezra Klein's Wonkblog.]

2 Responses to “ Why Refusing Medicaid Expansion Could Kill Pennsylvania’s Hospitals ”

  1. jk says:

    NB – the linked article was not written by Klein.

  2. ML_EngAm says:

    Regardless of whether or not one supports the ACA, the bigger concern here is political posturing vs. financial solvency. Although the ACA may be up in the air for now, long-term implications of states denying the expansion are amounting to great losses of necessary state funding. While I am not advocating for or against expansion, the implications of refusal seem to be getting grimmer as the legislation is explored. Unless these states can find fair and sustainable solutions to the budget gaps, denial seems like a dangerous gamble.

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