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State Budget

2013-2014 State Budget and Medicaid Expansion

Last Updated: 5/9/2013

The Latest: Studies conducted by RAND Health, the Pennsylvania Economy League, and the state’s Independent Fiscal Office all concluded that the positive economic impact of Medicaid expansion (more than $1.7 billion in new tax revenues) will exceed the costs of expansion (approximately $1.6 billion). More specifically:

While the total additional cost to the state to expand Medicaid is estimated at $1.64 billion, the commonwealth stands to receive $16.5 billion in federal payments. That is a 10:1 return.
Medicaid expansion will result in more than $7 billion in positive economic activity and result in a state gross domestic product (GDP) of nearly $24 billion.
This expanded economic activity will support 35,000-39,000 jobs.
The RAND study estimated that expansion would lead to health insurance coverage for up to 350,000 low-income non-elderly Pennsylvanians.

Without Medicaid expansion, there would be no infusion of federal revenues, no resultant growth to the state economy, no additional jobs, and the cost of care provided to these currently uninsured individuals will remain uncompensated. The Pennsylvania hospital community supports the expansion of Medicaid eligibility to provide low-income workers with health insurance coverage, and is advocating that the state move forward with expansion.

Background: Governor Corbett introduced his 2013-2014 state budget, which calls for $28.4 billion in state spending—a 2.4 percent increase over last year’s budget. The Governor’s budget plan preserves inpatient hospital payments at current-year levels, including supplemental payments for critical access hospitals, trauma centers, medical education, obstetrics and neonatal services, and other key hospitals programs serving the state’s most vulnerable citizens; but does seek additional funds from the statewide hospital Quality Care Assessment. “In this difficult budget environment, we thank Governor Corbett for his recognition of the critical role hospitals play in the health of our citizens and our economy, said HAP President and CEO Andy Carter in a news release. Additional information about the proposed budget is available in HAP Memo 13-08.

Additional Information: