Protecting Hospital Stability Takes Center Stage during Pa. Budget Hearing

Stabilizing hospitals is a bipartisan issue

February 25, 2026

Pennsylvania lawmakers must work together to protect hospitals’ financial stability, the state’s Human Services secretary said during a budget hearing today.

The commonwealth’s economic growth is “inextricably intwined” with having strong hospitals, Val Arkoosh, Human Services secretary, told the Senate Appropriations Committee this morning. Pending Medicaid cuts and tenuous margins put Pennsylvania’s hospitals at risk.

“This absolutely has to be a bipartisan issue,” Arkoosh said. “We have to find ways to stabilize and secure our hospitals.”

The daylong hearing included several highlights for the hospital community. Here are three key takeaways:

1. Looming federal cuts to put hospitals at risk

Starting in 2028, Pennsylvania’s Medicaid program could lose $20 billion over a decade in a “worst case scenario” stemming from last year’s federal reconciliation bill, Arkoosh said.

Pennsylvania’s hospitals, particularly those in rural areas and others in urban centers, would face the largest burden. Many of those facilities have tight margins or are operating in the red, she said.

“There is going to be very little that we can do if these kinds of funding cuts come into play, unless the state decides to somehow try to backfill some of these cuts,” she said.

The state is limited in how it can use the funding from the Rural Health Transformation Fund, because it cannot be used for operating costs.

“It will be able to do a lot of other great things that we are excited about,” she said. “It is not going to be able to save these rural hospitals.”

2. Coverage impact of H.R. 1

During 2027, about 700,000 Pennsylvanians on Medicaid will have to prove their eligibility every six months and meet new work requirements following the passage of the federal reconciliation bill.

The state is working to update its systems to make the eligibility process more seamless. The added reporting requirements will likely mean people lose coverage they still qualify for because they did not submit the proper information, Arkoosh said.

“There is so much uncertainty about what’s going to happen next federally,” Arkoosh said. “H.R. 1 or the One Big Beautiful Bill will have some very consequential impacts on the commonwealth. It is going to increase the number of uninsured in Pennsylvania.”

3. Grow PA Scholarships

The Grow PA Scholarship Grant Program had a strong year, lawmakers noted, with 11,000 applications from 162 schools to 5,700 recipients.

The program offers scholarship programs to students in health care and other in-demand careers who agree to live and work in Pennsylvania. Additional information about the program is available online.

HAP continues to call on lawmakers to support Pennsylvania’s hospitals and protect access to care. Be on the lookout for additional updates on the state Senate and House budget hearings. Watch the hearings with the Department of Human Services online.