Beware of Looming Medicaid Increases

A recent article by the National Center for Policy Analysis showed why states are going to be bankMedical Symbolrupted by the Medicaid provisions of the Patient Protection and Affordable Care Act (PPACA). The analysis highlights increased Medicaid eligibility, by expanding eligibility to families with incomes up to 133% of the federal poverty level, the program is expected to add around 16 million enrollees nationally.

The Federal Government pays for about 2/3 of Medicaid now (63.1% in PA), but will pay 100% of costs for newly eligible recipients until 2019.

Currently, the Commonwealth of Pennsylvania has just over two million Medicaid recipients. This represents 16.6 percent of the state’s population. According to NCPA projections, Pennsylvania will add an additional 745,000 recipients to the program.

Costs will also be passed on to private insurance consumers. In the Commonwealth, for every dollar a privately insured person will pay, a Medicaid recipient will only pay 59 cents. Many services rendered in PA have even lower reimbursement rates. This can also be devastating for some doctors and hospitals with tight margins.

In addition to low reimbursement rates, studies have shown that of those who will take advantage of the increased eligibility for Medicaid, about 50 to 75% of them will drop their private health insurance coverage. This will put even more pressure on state taxpayers and will increase private insurance costs.