Costa, Hughes prod Corbett to act

Harrisburg, March 28, 2013 – Two top Democratic state Senators who have been urging the Corbett administration to expand Medicaid said the governor should pay attention to a new, detailed study commissioned by The Hospital and Healthsystem Association of Pennsylvania (HAP) that shows the advantages of enrolling more Pennsylvanians in Medicaid.

Sen. Jay Costa (D-Allegheny), the Senate Democratic leader, and Senate Democratic Appropriations Chair Sen. Vincent J. Hughes (D-Philadelphia/Montgomery) said the study underscores the arguments they and their colleagues have been making: expanding Medicaid makes fiscal, political and moral sense.

“The evidence is clear that expanding Medicaid will help hundreds of thousands gain access to health care, save the state money, bolster the economy, create jobs and not cost the Corbett administration a dime,” Costa said. “The governor needs to weigh the evidence and do the math and expand Medicaid.”

Hughes, along with his Democratic colleagues on the appropriations committee, recently held a hearing on the issue in Pittsburgh and a roundtable discussion in Philadelphia to highlight the need for the expansion. Senate Democrats have introduced Senate Bill 12 which would compel Pennsylvania to participate in the expansion.

“The HAP study is conclusive that Medicaid expansion will deliver $2.2 billion to $2.5 billion in annual federal payments to Pennsylvania, generate more than $3.2 billion in economic activity and support more than 35,000 jobs,” Hughes said. “Most importantly, the study says 350,000 low-income, non-elderly Pennsylvanians would gain health insurance.”

The HAP study said Medicaid expansion will cost Pennsylvania $1.64 billion. However, $1.46 billion will be generated by gross receipts taxes and another $270 million will be generated from personal income taxes on jobs supported by the expansion. The revenue exceeds the costs by $90 million.

The proposed Medicaid expansion would cover individuals whose incomes are at or below 138 percent of the federal poverty level. The federal Affordable Care Act (ACA) included the expansion as a part of the coverage menu but was challenged in court.

The U.S. Supreme Court upheld the constitutionality of the ACA in its June 2012 decision but said states could decide on their own if they wanted to opt in to the expansion of Medicaid.

“We need to move aggressively in implementing provisions of the ACA so that we can help those who desperately need health care,” Hughes said. “The Corbett administration has been slow to come around to what we’ve been saying about the advantages of participating in the expansion of Medicaid.

“A small legion of Republican governors – including those from surrounding states and others who have far-right philosophies – have already said they will lead their states in helping more of their residents by expanding Medicaid. We need Gov. Corbett to take a good look at this study and lead.”

The HAP study says the enrollment of 350,000 more Pennsylvanians in Medicaid will drop the uninsured rate from 12.7 percent to 8.1 percent, and then 4.8 percent in 2016 when the non-compliance penalties of the ACA take effect.

“There is no question the HAP study shows there is significant upside to Pennsylvania’s participation in Medicaid expansion and very little downside,” Costa said. “The governor needs to understand we have a great opportunity and that expanding Medicaid is the right thing to do.”

The senators said that the HAP report only looked at economic benefits of the Gross Receipts Tax and the Personal Income Tax. It did not examine additional spinoff economic benefits or savings from offsets of state-funded programs that would result from the expansion.

A broader analysis by the Senate Democratic caucus concluded that 650,000 Pennsylvanians would gain access to health insurance through the Medicaid expansion, $670 million in new revenues would be generated, and $4 billion in federal monies would be leveraged.

The HAP report, “The Economic Impact of Medicaid Expansion on Pennsylvania,” was conducted by RAND Health, which is a research unit affiliated with the RAND Corporation.