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Another Study Comes Out in Support of Medicaid Expansion
Governor Corbett waffles on decision to participate
As part of President Obama’s health care reform, the federal Affordable Care Act (ACA) permits states to expand Medicaid to cover individuals whose incomes are at or below 138 percent of the federal poverty level.
The ACA included the Medicaid expansion as a part of the coverage menu, but it was challenged in court. The Supreme Court upheld the constitutionality of the ACA in its June 2012 decision. However, the court said states could decide on their own if they wanted to opt in to the expansion of Medicaid.
Senate Democrats have repeatedly asked the governor to allow Pennsylvania to participate in the expansion. Thus far, the governor has refused.
Several studies have provided conclusive evidence of the benefits of Pennsylvania’s participation. These studies all suggest that a significant number of Pennsylvania’s most vulnerable citizens would be covered, hundreds of millions in new revenues would be generated, billions in federal money leveraged and tens of thousands of new jobs created.
The HAP study that was completed by RAND Health concluded that Medicaid expansion would deliver for Pennsylvania:
- Up to $2.5 billion in annual federal payments to Pennsylvania;
- Generate more than $3.2 billion in economic activity;
- Support more than 35,000 jobs;
- Provide health insurance for 350,000 low-income, non-elderly Pennsylvanians;
- By enrolling 350,000 more Pennsylvanians in Medicaid, it would drop the state’s uninsured rate from 12.7 percent to 8.1 percent;
- The rate would drop even further -- to 4.8 percent in 2016 when the non-compliance penalties of the ACA take effect.
View Rand Study Here
According to the RAND Health study, Medicaid expansion would cost Pennsylvania $1.64 billion. However, an additional $1.46 billion would be generated by gross receipts taxes; and $270 million from personal income taxes on jobs supported by the expansion. The revenue ultimately would exceed the costs by $90 million.
The RAND Health report 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.
A broader analysis by the Senate Democratic caucus concludes that the expansion of Medicaid would:
- give 650,000 Pennsylvanians access to health insurance;
- generate $670 million in new revenues; and
- leverage $4 billion in federal monies.
PA, hospitals credit rating put in danger if Medicaid expansion is refused
Moody’s credit rating agency is saying hospitals, or states themselves, could face credit rating problems if they refuse Medicaid expansion under Obamacare.
A reduction in credit rating could increase the costs the state or hospitals pay when they borrow money for major projects. A decreased credit rating, over time, could cost taxpayers millions in interest payments.
» Read More
Employers may face higher tax penalties without Medicaid expansion
According to a report by Jackson Hewitt Tax Services, employers will have higher “shared responsibility” payments under the Affordable Care Act, totaling $876 million to $1.3 billion each year, if they fail to expand their Medicaid programs.
Under the “shared responsibility” provisions of the Affordable Care Act, employers that offer health coverage and have 50 or more full-time employees must pay up to $3,000 penalties for each employee who enrolls in the premium assistance tax credits.
If Pennsylvania fails to expand the Medicaid program, then eligible employees who are between 100 to 138 percent Federal Poverty Level, who would have otherwise enrolled in Medicaid, may enroll in the premium assistance tax credits. Their employers will then have to pay the penalties for these tax credits.
» Read the Report
Sen. Hughes, along with his Democratic colleagues on the Senate Appropriations Committee, held a hearing on the issue in Pittsburgh and a roundtable discussion in Philadelphia to discuss the need for the expansion.
Watch Full Medicaid Expansion Hearing
Compelling testimony was presented at the Pittsburgh hearing. Shona Eakin provided her insight about what it was like to be intertwined with the Medicaid system and why it was important for others to have access to health care insurance. To make sure the governor had a chance to view Shona’s testimony, I made copies of her presentation and delivered the video to the governor’s office.
In addition, Senate Democrats have introduced Senate Bill 12 which would compel Pennsylvania to participate in the expansion. Click here to read more about Senate Democrats legislation.
There are also significant job creation aspects of Medicaid expansion. According to Families USA and the Pennsylvania Health Access Network, Medicaid expansion benefits Pennsylvania:
- 41,200 jobs created;
- $5.1 billion in increased economic activity;
- Reduce uncompensated care costs by $878 million over nine years.
Learn more on the Affordable Care Act and Medicaid Expansion and provide your feedback on my website at senatorhughes.com as well as on Facebook and Twitter (@SenatorHughes).
Offices of State
Senator Vincent Hughes