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House memo reveals GOP leaders' caution against Medicaid growth, predicts higher costs

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Friday, June 21, 2013, 11:03 a.m.
 

HARRISBURG — With the Senate likely to vote next week on Medicaid expansion, House Majority Leader Mike Turzai told other leaders on Friday that he does not intend to run an expansion bill.

His comments followed a memo by House Health Committee Chairman Matthew Baker, R-Tioga County, on Thursday to Republican members, cautioning that program expansion could cost more than studies indicated and might require a state tax hike.

The state “is already struggling with an $8 billion program, which expanded greatly under the (Gov. Ed) Rendell administration,” Turzai, R-Bradford Woods, wrote in an email.

Pennsylvania spends $7,400 per recipient, compared with a national average of $4,000 to $5,000 per recipient, Turzai noted.

Medicaid is government-subsidized health insurance for low-income people, and proponents say expansion could add 600,000 of the uninsured through increased federal funding for states under the 2010 Affordable Care Act.

The law gives states the choice to expand or not. About half of the states have agreed. Republican Gov. Tom Corbett is negotiating with the federal government to gain flexibility and reduce state costs for Pennsylvania's program.

Any bill the Senate approved would come to Baker's committee.

“I want to publicly announce that I stand firmly beside the majority leader in his view that Medicaid expansion is wrong for Pennsylvania and would result in dire financial struggles for the commonwealth in the near future,” Baker wrote.

Senate President Pro Tempore Joe Scarnati, R-Jefferson County, said any bill developed by the Senate needs fiscal controls. He said he's not interested in a bill that merely authorizes expansion.

Senate Minority Leader Jay Costa, D-Forest Hills, said he believes senators will reach agreement on a Medicaid bill, and that a universal deal is possible with Corbett and the House.

The potential for Senate passage rests with at least three Republicans joining 23 Democrats.

Supporters say expanding Medicaid would provide $2 billion more annually to the state, create jobs and reduce so-called “uncompensated care,” or state reimbursements to hospitals and health facilities for services provided to the uninsured.

At a hearing before Baker's panel Thursday, “Experts from the federal government, state lawmakers, health care policy groups and physicians cautioned Pennsylvania legislators from moving forward with Medicaid expansion,” Baker told his colleagues.

“Their testimony raised grave concerns about the number of enrollees in the Medicaid program and the cost to the state,” he wrote.

“The committee also heard testimony which set the commonwealth's cost for Medicaid expansion at $5.8 billion in the first 10 years,” Baker wrote. “Other studies, such as the Kaiser Family Foundation and the Urban Institute, project the cost to the commonwealth at about $4 billion over 10 years. This cost will need to come from new state tax dollars and does not account for the tax dollars sent by Pennsylvania to the federal government to pay for Medicaid expansion.”

A federal official from Health and Human Services, the agency overseeing Medicaid, said states were offered a “very favorable deal,” in which the government pays 100 percent of expansion costs the first three years and 90 percent thereafter.

Brad Bumsted is Trib Total Media's state Capitol writer. Reach him at 717-787-1405 or bbumsted@tribweb.com.

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