State Budget

Medical Assistance Enrollment Up, Hospital Payments Down

When Governor Rendell released his 2010-2011 state budget on February 9, he stated that one of his priorities was "meeting the state's health and safety responsibilities." The hospital community supports the budget's funding increase for more enrollment in the government-sponsored Medicaid insurance program for low-income people and families (called Medical Assistance in Pennsylvania). However, the proposed budget reduces payments to those safety net health care providers who render services to those same people.

The nation's slow and jobless economic recovery continues to drive up enrollment in Pennsylvania's Medical Assistance insurance program. Pennsylvania's enrollment in Medical Assistance grew 5 percent from January 2009 through December 2009, from 1.99 million to 2.09 million Pennsylvanians. Yet the Governor proposed a state budget for 2010-11 with cuts totaling $51 million in state and federal funds.

"These are trying times for everyone. While mindful of the budget difficulties facing Pennsylvania, we must ensure that full-service hospitals can continue their role of providing needed care while acting as a key source for jobs and job-growth opportunities. This is especially true for hospitals and providers that serve a disproportionate share of people covered under Medical Assistance or without health insurance," said H. Ray Welch Jr., president and chief executive officer, Mercy Health System, in southeastern Pennsylvania.

Protecting Hospital Funding and Jobs

Hospitals support one out of every ten jobs in Pennsylvania. The health care sector is one of the few parts of the economy maintaining employment and even supporting job growth. With Pennsylvania's unemployment hovering near the highest level in 25 years, the state budget should support, not undermine, hospitals' financial viability, so they can continue to function as some of the state's largest, most reliable employers.

In next year's state budget, hospital Medical Assistance payments must at least hold steady. They should not be reduced by $51 million, as currently proposed.

"The global recession is just that. We are certainly experiencing its effect in north central Pennsylvania, an area which already has a higher than average unemployment rate. We certainly understand the impact that it has had on state budgets. Yet, any further cuts in Medical Assistance payments would negatively impact our hospital and the communities that we serve through further loss of hospital jobs and reductions in services," said Edward C. Pitchford, president and chief executive officer, Charles Cole Memorial Hospital.

Help From the Federal Government?

The proposed state budget relies on federal legislation to extend a temporary increase in the Federal Medical Assistance Percentage (FMAP) and bring an additional $850 million to Pennsylvania. These additional funds are needed to help assure that Medical Assistance patients have access to health care. It's crucial to hospitals across the nation that Congress pass federal legislation extending the FMAP increase. It's also crucial that Pennsylvania's state budget uses these funds for its intended purpose--to ensure continued patient access to hospital care--and not divert the funds elsewhere in the state budget.

How You Can Help

Over the coming weeks, hospitals will receive additional details about the state budget. There are several ways you can help protect health care in Pennsylvania by advocating for hospitals:

1. Sign up now to continue to receive updates.
2. Consider submitting a personal story about how cuts in Medical Assistance funding would impact you, your patients, your hospital, or your community. The CareForPA website has a quick and easy way for you to share your story.
3. Prepare now to speak out on behalf of your hospital. When asked to contact your lawmakers about this important issue, use the resources in the Legislative Action Center area of CareForPA website to send email messages.