Corbett: State Can't Absorb Medicaid Expansion Costs

By Melissa Daniels | PA Independent

HARRISBURG — Gov. Tom Corbett said that expanding Medicaid in accordance with the Patient Protection and Affordable Care Act would cost the state millions of dollars that it doesn’t have.

“I don’t think there’s any way we can absorb this,” Corbett said of the expansion costs, while speaking to the Pennsylvania Press Club recently.

As multiple states make their announcements on whether or not to expand Medicaid to more residents, Pennsylvania has yet to come out one way or the other. But Corbett was specific in citing associated costs, adding that Pennsylvania may not have room in the budget to cover them.

Kevin Harley, Corbett’s press secretary, said later that the state is still waiting to hear back from the federal government on certain questions before making a decision.

But there’s little flexibility in the timeline. If the state decides to opt into the expansion, it would have to allocate resources in its 2013-2014 budget, as the new Medicaid eligibility standards will kick in that fiscal year.

“In a very tight budget year, with revenues very tight, it becomes a question we have to look at seriously,” Corbett said.

While costs for newly eligible residents will be covered by the federal government in full, costs for residents who join and were previously eligible are not.

Without opting into the expansion, these “woodwork” costs would be $134 million, Corbett said, reading off notes he brought up to the podium ahead of time. A limited expansion would cost an estimated $178 million in that year, and full expansion would be almost $222 million, Corbett said.

By 2021, the state would need to spend more than $4 billion in connection with a full expansion, Corbett said.

Spending on Medicaid and other social services takes up around 38 percent of the annual budget as it stands, Corbett said.