Report on the Impact of Proposed Medicaid Cuts in Pennsylvania

Overview

Proposed Medicaid cuts in the Congressional Republicans’ budget bill threaten to severely impact Pennsylvania’s healthcare system, particularly affecting rural communities. These cuts risk undermining access to care, increasing healthcare costs, and jeopardizing the viability of rural hospitals. The combined effect of federal Medicaid reductions and the expiration of enhanced premium tax credits through Pennie, Pennsylvania’s health insurance marketplace, could result in loss of coverage for over 570,000 Pennsylvanians.

Concerns Raised by Health Leaders

• Nicole Stallings, President and CEO of The Hospital and Healthsystem Association of Pennsylvania, emphasized that the proposed Medicaid cuts will endanger access to care, especially in rural areas, thereby harming community health and economic competitiveness.
• Secretary of Health Dr. Debra Bogen highlighted that losing health insurance forces individuals to forgo preventive care and rely on emergency services, leading to worse health outcomes, increased uncompensated care, higher premiums, and overcrowded emergency rooms.
• Pennsylvania Insurance Commissioner Michael Humphreys noted that failure to renew enhanced premium tax credits will increase uninsured rates and threaten rural hospitals’ financial stability.
• Department of Human Services Special Advisor Sara Goulet warned that Medicaid cuts will create a public health crisis, with catastrophic effects on rural economies and healthcare systems.

Potential Consequences of Medicaid Cuts

1. Increase in uncompensated care burden on hospitals and healthcare providers.
2. Worsening of chronic health conditions such as diabetes and heart disease due to delayed or foregone treatment.
3. Higher healthcare costs over time resulting from advanced disease diagnoses and emergency care reliance.
4. Strain on county and local agencies responsible for Medicaid eligibility and program support.
5. Risk of rural hospital closures, reducing healthcare access in underserved areas.

Financial Context

Medicaid currently covers approximately three million Pennsylvanians. For fiscal year 2024-25, Pennsylvania allocated over $14 billion in state funds to Medicaid, matched by more than $30 billion in federal funds. The proposed cuts would create an unfunded administrative burden and reduce available resources for healthcare delivery.

State Government Response and Investments

Governor Josh Shapiro’s proposed 2025-26 budget prioritizes rural healthcare access and includes:

• $10 million in state funds to leverage $35.1 million in federal funding for rural hospital support.
• $5 million to expand the Department of Health’s Primary Care Loan Repayment Program, incentivizing healthcare providers to serve in rural communities.
• $20 million dedicated to patient safety and quality improvement initiatives aimed at reducing barriers such as affordability and transportation.
• $5 million to address nursing shortages through the Nurse Shortage Assistance Program.
• $10 million to expand behavioral health loan repayment programs to meet mental health care demands and workforce shortages.
• $10 million in state funds to support all Pennsylvania hospitals, leveraging an additional $35.1 million in federal funding for urgent patient needs and staffing.

Alignment with Sustainable Development Goals (SDGs)

The efforts to protect and enhance Medicaid funding and healthcare access in Pennsylvania align with several United Nations Sustainable Development Goals:

• SDG 3: Good Health and Well-being – Ensuring healthy lives and promoting well-being for all ages by maintaining access to affordable and quality healthcare services.
• SDG 1: No Poverty – Reducing financial hardship caused by healthcare costs through Medicaid coverage and premium tax credits.
• SDG 8: Decent Work and Economic Growth – Supporting rural hospitals and healthcare providers sustains jobs and economic stability in communities.
• SDG 10: Reduced Inequalities – Addressing disparities in healthcare access, especially in rural and underserved populations.
• SDG 9: Industry, Innovation, and Infrastructure – Investing in healthcare infrastructure and workforce development programs.

Conclusion

The proposed federal Medicaid cuts and expiration of enhanced premium tax credits pose significant risks to the health and economic well-being of Pennsylvanians, particularly in rural areas. State initiatives aim to mitigate these impacts by investing in healthcare access, workforce development, and quality improvement. Protecting Medicaid and supporting healthcare infrastructure are critical to achieving sustainable development and ensuring equitable health outcomes across Pennsylvania.

1. Sustainable Development Goals (SDGs) Addressed or Connected

1. SDG 3: Good Health and Well-being
   • The article focuses on access to healthcare, health insurance coverage, and the impact of Medicaid cuts on health outcomes, particularly in rural areas.
2. SDG 8: Decent Work and Economic Growth
   • The economic competitiveness of rural communities and the financial stability of hospitals are discussed, linking health system funding to economic well-being.
3. SDG 10: Reduced Inequalities
   • The article highlights disparities in healthcare access between urban and rural populations and the risk of increased uninsured rates.

2. Specific Targets Under Those SDGs

1. SDG 3: Good Health and Well-being
   • Target 3.8: Achieve universal health coverage, including financial risk protection, access to quality essential health-care services, and access to safe, effective, quality, and affordable essential medicines and vaccines for all.
   • Target 3.c: Substantially increase health financing and recruitment, development, training, and retention of the health workforce in developing countries, including rural areas.
2. SDG 8: Decent Work and Economic Growth
   • Target 8.2: Achieve higher levels of economic productivity through diversification, technological upgrading, and innovation, including in rural areas.
3. SDG 10: Reduced Inequalities
   • Target 10.2: Empower and promote the social, economic, and political inclusion of all, irrespective of age, sex, disability, race, ethnicity, origin, or economic or other status.

3. Indicators Mentioned or Implied to Measure Progress

1. SDG 3 Indicators
   • Proportion of population covered by health insurance (implied by the number of Pennsylvanians losing Medicaid and Pennie coverage).
   • Rates of uncompensated care and emergency room overcrowding as measures of healthcare system strain.
   • Prevalence and management of chronic conditions such as diabetes and heart disease.
   • Number of healthcare providers serving rural communities (linked to loan repayment programs).
2. SDG 8 Indicators
   • Economic competitiveness of rural communities (implied by hospital closures and healthcare access affecting local economies).
   • Employment levels in healthcare facilities, including rural hospitals.
3. SDG 10 Indicators
   • Disparities in health insurance coverage between urban and rural populations.
   • Rates of uninsured individuals in different demographic groups.

4. Table: SDGs, Targets and Indicators

Source: pa.gov