Federal aid buoys health spending in PA

Pennsylvania’s state budget cuts overall spending by more than 1 percent from last year, but policy experts say health spending in the Commonwealth is largely intact. WHYY explains where the extra money came from.

Pennsylvania’s state budget cuts overall spending by more than 1 percent from last year, but policy experts say health spending in the Commonwealth is largely intact. WHYY explains where the extra money came from.
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Listen: [audio:091020tebudget.mp3]

Sharon Ward leads the Pennsylvania Budget and Policy Center. She says we can thank the federal government for keeping things going.

Ward: The most important thing to know is that the federal stimulus dollars successfully averted major cuts to health care programs in Pennsylvania. Without that this budget would not be balanced at all.

She says $1.7 billion in federal money will help pay for long term care services as well as health care for poor and disable people.

Ward says the budget acknowledges that the faltering economy will leave many kids without access to health care. Lawmakers boosted state funding for the Children’s Health Insurance Program.

Hospitals that serve large numbers of poor and uninsured people will get less help from Pennsylvania this year. Hospitals get bonus payments for treating low-income people, but Pennsylvania’s new state budget trims those extra payments. Critics say medical centers in urban areas like Philadelphia will be especially hard hit.

Paula Bussard leads regulatory affairs at the Pennsylvania hospital association. She says hospitals are facing difficult choices.

Bussard: Whether they continue to be able to provide obstetrics services, or whether they are able to continue to serve people who have behavioral health or psychiatric needs. It just makes it more challenging. So it can impact everyone seeking care that hospital including people who aren’t on medical assistance.

Pennsylvania doctors contend the General Assembly balanced the state budget by raiding two pots of money earmarked for physicians. The funds were established to help doctors pay for malpractice insurance.

The Pennsylvania Medical Society says the state is draining the insurance fund, called MCARE. Government affairs director Scot Chadwick worries that Pennsylvania will levy fees on physicians to pay more than a billion dollars in anticipated future claims.

Chadwick: It will just continue to bill physicians and hospitals for the money it takes to pay off that $1.66 billion long after they are no longer selling any coverage. For a new physician who comes in to the state and never gets any MCARE coverage but has to pay this bill for the next 20 years, that’s like getting the mortgage and not getting the house.

The medical society is suing Pennsylvania to get about $100 million returned to the malpractice insurance fund.