The Republican proposal to cut federal Medicaid and Affordable Care Act (ACA) funding could leave half a million Pennsylvania residents uninsured. The plan, which the Senate has not yet approved, would reduce funding for these programs by more than $800 million over the next 10 years. The goal is to fund tax breaks sought by the current administration.
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Valerie Arkoosh, Secretary of the Pennsylvania Department of Human Services (DHS), recently discussed the potential impact of these cuts.
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She warned that the changes could create an “unprecedented and unfunded increase in administrative load.” The department may need to increase its staff to meet the new federal demands significantly. This would fundamentally restructure the way Medicaid has operated for the past 60 years.
Medicaid and ACA marketplaces have greatly reduced uninsured rates in Pennsylvania.
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However, the Congressional Budget Office estimates that about 10.7 million people nationwide could lose coverage over the next decade under the Republican proposal. In Pennsylvania, officials estimate that half of the 500,000 people enrolled in plans through Pennie, the state’s ACA marketplace, would no longer be able to afford coverage or would become uninsured.
An additional 300,000 people are expected to lose Medicaid coverage because they may struggle to navigate the new regulatory requirements. One major change under the proposal is that adults under 64 who are not disabled would have to prove every month that they are employed or actively seeking work to remain enrolled in Medicaid.
Impact on Pennsylvania’s uninsured rates
This shift from annual to bi-annual eligibility checks would increase the administrative burden on the DHS. The state would also need significant IT infrastructure upgrades to process these checks and comply with the new requirements. Changes to the ACA marketplaces could also hurt enrollment.
Pennie administrators have warned that without the renewal of enhanced tax credits by Congress, next year’s insurance costs could significantly increase for marketplace users. Currently, these tax credits ensure that no one pays more than 8.4% of their income on health insurance. If Congress does not act, only individuals earning less than $60,000 a year would qualify for the credits.
This would result in an average increase in insurance costs of 82%, with some individuals seeing their costs double or triple. The Republican budget proposal also includes measures that would require people whose plans are automatically renewed to reapply for coverage and experience a shorter annual enrollment period. Critics argue that these are real barriers that could decrease enrollment and hinder access to care for residents.
The proposed federal cuts to Medicaid and ACA marketplaces present substantial challenges for Pennsylvania. The state would need to invest heavily in administrative and IT resources to comply with new federal mandates. This has significant implications for the hundreds of thousands of residents who depend on these programs for their health coverage.
