The Corbett approach to Medicaid sanity

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Once a month the Horsham Republican Committee meets to discuss political developments – both local and regional; to strategize on political organizing within Horsham Township; and to update the Committee on issues of Party management.

To be honest, the meetings can be a bit dry, and that’s even if you’re a bit of a political junkie.  It’s not often that we get into REAL political discussions that provide interesting insights into the issues of the day.

This past Wednesday was different with a small but animated gathering of committee representatives (who represent township Republicans in matters of Party interest), local Republican pols, and the local Party leadership.

My keenest interest is always with the progress – or lack thereof – in Horsham Township’s redevelopment plan for the NAS-JRB Willow Grove property.  At present the Horsham Local Redevelopment Authority (HLRA) is awaiting the approval of its redevelopment plan, which was submitted in the Spring of 2012.

It’s been a year-and-a-half, and no decision as yet from the U.S. Navy.  The Federal Government, which must review and approve the plan before fully vesting the HLRA with redevelopment authority, indeed takes its time when mulling over any decision.  In this case, the Navy, charged with the responsibility of conducting an Environmental Impact Statement (EIS) has met delays in completing their evaluation.  The plan – due this Fall – will not be ready until Winter at the earliest.

Which means, look for it in the Spring or Summer.

The Navy blames the effects of sequestration.  But frankly, as a federal employee, I can speak confidently that, if it wasn’t the effects of sequestration, it would have been something else that would delay such a huge and complex evaluation.  No, not unexpected at all …

Several other issues were also touched on briefly as updates from Harrisburg.

  • Movement on Pennsylvania’s transportation bill, which is seeing progress in the State House after the Senate passed their version earlier in the year.  The biggest hurdle would be in reconciling the two versions as passed, particularly to the level of funding.  There are roughly $5 billion in infrastructure improvements that have been underfunded for decades and well overdue for remedial action.
  • Pension reform at the State level is getting much discussion.  With the State’s two pension plans (state employees, public school employees) underfunded by $47 billion (!) and projected to grow to $65 billion without action, Governor Corbett has moved pension reform to the top of his list of priorities.  Currently, the biggest reform under consideration is moving new employees in both categories into 401(k)-type programs that are similar to those found in the private sector.
  • A brief discussion on the national Affordable Care Act (Obamacare) revealed one persistent problem in Pennsylvania’s rural health services … Finding doctors to work in the less income-lucrative areas of rural Pennsylvania.  This has long been a problem nationwide, not just in PA.  One solution, proposed by the Corbett Administration in its recent proposal for expanding Medicaid as part of its ACA compliance, is a student loan forgiveness program for any doctors who agree to spend a specified amount of time in Pennsylvania’s more doctor-needy areas.
PA Governor Tom Corbett

PA Governor Tom Corbett

The discussion I found most interesting this night dealt with the recent Corbett Administration proposal for expanding Medicaid.  Some of the facts and issues covered …

  • All state-run Medicaid programs vary in benefits and costs from state-to-state.  The terms of Medicaid coverage are negotiated by each state individually.  Passage of the ACA effectively “locked in” every state’s specific Medicare program in whatever form it existed at the time.
  • After eight years of Ed Rendell’s Democrat Administration in Harrisburg, Pennsylvania’s current Medicaid program is one of the most generous – if not THE most generous – state program in the U.S.  This goes a long way towards explaining why some states, such as New Jersey and Arizona are more willing and able to accept the ACA-mandated expansions required for full state participation in federal-run healthcare exchanges.
  • Currently the State and Federal governments combine to spend about $19 billion a year to cover 2.2 million Pennsylvanians on Medicaid!  $19 billion …!!
  • The federal government’s ACA Medicaid expansion financial contribution maxes out at 90% after three years of fully funded coverage. That 10% unfunded liability equals an additional estimated  $200 million – as a minimum – that will have to be covered by the Pennsylvania state budget!
  • Even before any ACA-mandated Medicaid expansion, Pennsylvania estimates Medicaid costs will grow by $400 million in fiscal year 2013-2014.
  • A Rand Corporation study showed that Pennsylvania would save roughly $154 million a year by not expanding Medicaid coverage.

So it’s pretty easy to see why the Corbett Administration is not all that anxious to get on board an ACA-mandated Medicaid expansion.

As with the Philadelphia School District’s annual funding crisis, the Corbett Administration has taken a very responsible approach to any expansion of the financial commitment falling to Pennsylvania’s tax payers.  The Governor realizes that without reforms accompanying this constantly growing financial responsibility, the economic health of the State will be threatened.

images-3In the Philly school crisis, by which you can calibrate your calendar each year, additional funding was offered to the City through negotiations with Mayor Michael Nutter’s administration.  The catch was that the settlement required reforms that call for concessions by the Philadelphia teacher’s unions.

Concessions are necessary on the cost-side of the Philadelphia school issue, if the cycle of funding crisis followed by funding crisis is ever to be broken.  You should not be surprised in realizing that funding solution never really had a chance to succeed.

As for the Medicaid expansion, the facts are that without serious reforms in the way the Pennsylvania program is managed, the state’s’s tax payers and businesses will be on the hook for that rather significant $200 million hole in the Pennsylvania budget … on top of the projected $400 million shortfall for FY13-14 … plus all other projected increases.  Cost reform is essential to Pennsylvania’s future fiscal sanity.

There’s also the very real possibility that the Federal government may not be able to uphold even its 90% Medicaid expansion funding as promised.  And what happens then? 

For these reasons, the Corbett Administration’s approach to the ACA federal exchange and Medicaid expansion proposal should be lauded as the kind of fiscal sanity one should expect from their Governor.

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