Fact Sheet: Understanding Medicaid in Pennsylvania 2019
What is Medicaid?
Medicaid is a jointly funded, federal-state health insurance program for low-income populations. Of the roughly $581.9 billion spent on Medicaid nationally in 2017,  the federal share was 63 percent. Each state government’s share varies; in Pennsylvania, it has been 52 percent annually from fiscal year (FY) 2015 through FY 2019.
All states must meet federal minimum requirements, but can opt for broader eligibility. Pennsylvania’s Medicaid program covers children, pregnant women, parents, seniors, and individuals with disabilities, as well as other adults who are eligible for federally assisted income maintenance payments.
The Affordable Care Act (ACA) extended Medicaid eligibility to non-elderly adults with incomes at or below 138 percent of the federal poverty limit (FPL)—during 2019, that is $35,535 for a family of four. States that choose to participate in this expansion receive enhanced federal matching payments. Pennsylvania opted to expand its Medicaid coverage during 2015.
Federal law requires state Medicaid programs to cover 15 basic services, but states also can choose to cover up to 28 optional benefits. Pennsylvania covers 24 optional benefits, including prescription drugs, vision, dental, physical therapy, home health, and hospice care. It also includes the ACA’s ten essential health benefits, such as preventive care, as well as expanded mental health and substance use treatment services.
Adequacy of Medicaid Payments
HAP commissioned the health care economics and consulting firm Dobson DaVanzo & Associates LLC to complete a report about the adequacy of Medicaid program payments to Pennsylvania hospitals. Based upon fiscal year 2016 data, Medicaid paid only 81.1 cents on the dollar of cost, which resulted in a $1.2 billion Medicaid payment shortfall.
- While the elderly and people with disabilities comprise only 30 percent of the total Pennsylvania Medicaid population, they account for 78 percent of Medicaid expenditures.
- During 2017, 34.2 percent of Pennsylvania’s 137,771 births were funded by Medicaid. ,
- Two-thirds of all nursing home residents are covered by Medicaid.
- As of December 2018, approximately 2.8 million people were enrolled in Medicaid in Pennsylvania.
- More than 750,000 Pennsylvanians have benefited from health insurance coverage under Medicaid expansion, as of November 2018.
- Uncompensated care foregone revenue for Pennsylvania hospitals decreased 29 percent between 2014 and 2017, following Medicaid expansion.
Myth 1: Pennsylvania Medicaid is not cost effective.
FACT: Per capita spending in Medicaid is lower compared to private insurers. For example, one study found that Medicaid provides access to comparable care at significantly lower costs and calculated that private insurance costs would be 25 percent higher than Medicaid costs for the same low-income adult.,
FACT: Medicaid managed care rate increases have been consistently below the medical trend.
FACT: Nationally, between 2006 and 2013, per enrollee cost growth in Medicaid (1.9%) was lower than the per enrollee cost growth in comparable coverage under Medicare (2.6%), or private health insurance (4.4%).
Myth 2: The expansion population consists of able-bodied adults who can get private insurance.
FACT: Nearly half (43 percent) of the state’s Medicaid expansion population works full or part time, but makes less than the Medicaid eligibility threshold of 138 percent of the FPL.
FACT: Many newly eligible adults suffer from chronic conditions. Between March 2015 and April 2016:
- 31 percent of the expansion population were diagnosed with and/or treated for substance use disorder and/or mental health conditions
- 17 percent had a cardiovascular condition; 5% had Type 2 Diabetes
- 130,000 newly eligible Medicaid enrollees suffer from substance use disorder, and during 2017, more than 72,000 were diagnosed with opioid use disorder
Myth 3: Medicaid is a poor-quality program that has little impact on people’s health and financial security.
FACT: National studies show that having health insurance coverage under Medicaid has positive impacts on infant, child, HIV, adult, and disease-related mortality, and mental health status/rates of depression.
FACT: State Medicaid expansions are associated with improved access to preventive care, self-reported improved health (for example, blood pressure screening, flu shots, and annual check-ups), and reduced mortality among adults.
FACT: Medicaid expansion has led to major improvements in the financial security of eligible low-income adults. For example:
- An estimated 11,700 Pennsylvanians were saved from catastrophic out-of-pocket medical costs because of Medicaid expansion
- An estimated 37,100 Pennsylvanians did not have to borrow to pay bills or skip payments, thanks to Medicaid expansion
Myth 4: Pennsylvania Medicaid does not provide access to care to recipients.
FACT: Contractual safeguards require Managed Care Organizations (MCO) to have an adequate network of providers in place to serve their enrollees.
FACT: 2016 Medicaid surveys and program measures validate that consumers have access to care—76 percent of adults and nearly 86 percent of children report getting an appointment for routine care “usually or always.”
FACT: Pennsylvania’s Medicaid expansion enrollees gained access to live-saving care, including nearly 230,000 emergency room visits, 425,000 primary care visits and preventive screenings that diagnosed 37,000 instances of cancer.
Myth 5: Fraud is rampant in Pennsylvania’s Medicaid Program.
FACT: Pennsylvania Medicaid’s error rates in fee-for-service and managed care are well below the national average.
FACT: Pennsylvania’s managed care program includes significant controls to detect and deter fraud, abuse, and waste
1 National Health Expenditure Fact Sheet. Centers for Medicare & Medicaid Services. File last updated: 2/20/2019. Last Accessed: 4/1/2019
2 2017 Actuarial Report on the Financial Outlook for Medicaid, Centers for Medicare & Medicaid Services, 2018. See Executive Summary, p. iv. Last accessed: 3/29/2019
3 Medicaid’s Federal Medical Assistance Percentage (FMAP), Congressional Research Service, April 25, 2018. See Appendix A, FMAP Rates for Medicaid, By State, p. 13
4 Medical Assistance General Eligibility Requirements. Pennsylvania Department of Human Services. Last accessed 4/1/2019. See also: Pennsylvania Medicaid Program. Published by Benefits.gov. Last accessed: 4/1/2019
5 Medicaid Expansion to the New Adult Group. Medicaid and CHIP Payment and Access Commission. Last updated: 11/2018. Last accessed: 4/1/2019
6 HHS Poverty Guidelines for 2019 indicate poverty level is $25,750 for a family of four; $35,535 is the Pennsylvania threshold. Data published by U.S. Department of Health & Human Services. Office of the Assistant Secretary for Planning and Evaluation. Last updated: 2/1/2019. Last accessed: 3/18/2019
7 Governor Tom Wolf Launches Medicaid Expansion in Pennsylvania. 2/9/2015. Last accessed: 3/29/2019
8 Mandatory and Optional Medicaid Benefits. Medicaid.gov. Last accessed: 4/1/2019
9 Department of Public Welfare, Medical Assistance. Primer from the House Appropriations Committee. 6/26/2013. Last accessed: 4/1/2019
10 Information on Essential Health Benefits (EHB) Benchmark Plans. Centers for Medicare & Medicaid Services, Center for Consumer Information and Insurance Oversight. Last accessed: 3/20/2019
11 Who gets Medicaid? Based upon FY 2018-19 non-federal share spending. Pennsylvania Department of Human Services. Last Accessed: 4/1/2019
12 Vital Statistics Annual Reports, Birth Report. Pennsylvania Department of Health. See Table B-17A, Resident Live Births by Age of Mother and Principal Source of Payment, p. 34. Last Accessed: 3/25/2019
13 Vital Statistics Annual Reports, Birth Report. Pennsylvania Department of Health. See Table B-1, Resident Live Births, p. 18. Last Accessed: 3/25/2019
14 Medicaid in Pennsylvania. Kaiser Family Foundation. 11/2018. Last accessed: 3/29/2019
15 December 2018 Medicaid & CHIP Enrollment Data Highlights. Medicaid.gov. 12/2018. Last Accessed: 3/20/2019
16 Medicaid in Pennsylvania. Kaiser Family Foundation. 11/2018. Last accessed: 3/29/2019
17 Medicaid Expansion Report Update, Pennsylvania Department of Human Services, 2019. See page 4, “Impact on Uncompensated Care.” Last accessed: 3/26/2019
18 Medicaid Spending Growth Compared to Other Payers: A Look at the Evidence, Kaiser Family Foundation, Medicaid Issue Brief, April 13, 2016. Last accessed: 3/25/2019
19 Clemans-Cope L, Long, SK, Coughlin TA, et al. (2013) The Expansion of Medicaid Coverage under the ACA: Implications for Health Care Access, Use, and Spending for Vulnerable Low-income Adults. The Journal of Health Care Organization, Provision and Financing 50:135–149. Last accessed: 3/20/2019
20 Report to Congress on Medicaid and CHIP, Medicaid and CHIP Payment and Access Commission, June 2016. See Table1-1 Average Annual Growth in Medicaid Spending per Enrollee Compared to Various Benchmarks, 1987-2023, p. 8. Last accessed: 3/29/2019
21 Medicaid Expansion Report, Pennsylvania Department of Human Services, 1/27.2017. See Section 6.1.2 Work, Housing, Parental, Marital, and Income Status, p. 49. Last accessed: 4/1/2019
22 Ibid, p. 55
23 Ibid, p. 46
24 Medicaid Spending Growth Compared to Other Payers: A Look at the Evidence, Kaiser Family Foundation, Medicaid Issue Brief. 4/13/2016. Last accessed: 4/1/2019
25 What is Medicaid’s Impact on Access to Care, Health Outcomes, and Quality of Care? Kaiser Family Foundation. Issue Brief, 2013. Last accessed: 3/20/2019
26 Affordable Care Act Pennsylvania Fact Sheet, Pennsylvania Insurance Department. Last Accessed: 4/1/2019
27 Affordable Care Act Pennsylvania Fact Sheet, Pennsylvania Insurance Department. Last Accessed: 4/1/2019
28 Pennsylvania Code, Title 28 Health and Safety, Chapter 9 Managed Care Organizations, Section 9.651. Last accessed: 4/1/2019
29 2016 External Quality Review Report United Healthcare, Pennsylvania Department of Human Services, Office of Medical Assistance Programs, April 2017. See Table 4.1 CAHPS 2016 Adult Survey Results and Table 4.2 CAHPS 2016 Child Survey Results, p. 36. Last accessed: 3/26/2019
30 Medicaid Expansion Report Update, p. 5. Pennsylvania Department of Human Services, 2019. Last accessed: 4/1/2019
31 Payment Error Rate Measurement Initiative. Pennsylvania Department of Human Services. Last accessed: 4/1/2019
Topics: Access to Care, Medicaid
Revision Date: 6/24/2019
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